Q. I recently bought an Asset Protection program and they suggest I set up a Nevada C Corporation to manage my rental properties and hold the properties in LLC's (which I have 3 LLC's). They claim using a C corporation I can take hundreds of deductions that are not available using other entities. However others say an S Corporation. Please give me some guidance. I don't want to pay anymore tax then I have to. I have aprox. 13 rental properties and am averaging one retail/rehab sale or TB exercising Option every other month.
A. There is nothing wrong with the advice you have been given. It may just be a little bit of overkill at this point. I have always wanted to protect my assets, minimize taxes and also keep it very simple so that I do not overcomplicate my life.
We hold properties in trust and the beneficiary of the trusts is an LLC. We only have one LLC for multiple properties. That LLC also handles the management. If you are going to hold a number of properties, you will most likely never have a tax consequence because the hold properties have
great tax benefits that flow up to your personal return. Even if you flip a few properties throughout the year.
A C corp would be wise if you plan to flip a bunch of properties and you will not have the rental properties to offset that income. It is also correct that there are more items available to deduct if you have a C corp - such as automobiles, etc..