Hi All,
I am in the process of closing on a commercial building - 1 bedroom upstairs and a business leasing the downstairs small office for the next 6 months. I am planning on moving my company S-corp Inc. into the office when their lease expires. What’s the best way to setup the buildings for tax proposes. I have reached out my cpa & various individuals with mixed opinions. Purchasing through personal finances.
Questions
Title through personal or buildings LLC. or consulting Inc.? Leaning towards creating new LLC. for building - renting apartment & leasing office through my business to myself?
Wondering what the best route will be to keep everything clean and separate for tax purposes and finances. There is some work to be done initially to apartment. Likely create separate checking account to keep profits/expenses easy to manage. Just want to get it squared away before closing and insurance requirements.
Any suggestions or thoughts from others with this process would be appreciated. Thanks!
The real answer is going to be the loan product you get on the building. You need to talk to your loan broker first and foremost and see what you can do. If you don’t have a good broker I can probably get you a referral to one.
Then if everything is good with the loan. Typically you want the property in it’s own LLC. And s corp is not a legal entity, it’s a tax election. And LLC can be taxed in multiple ways from passthrough to c corp taxes. This all depends on your personal situation as to what will be better for you individually. A good CPA will have those answers. Your job is to find the good one from the rest. Sounds like what you found out, you might not have the best CPA for your need.
100% this. A good CPA who is business savvy can help you make a good choice here. If you don’t have a decent CPA now is a good time to vet one; was one of the smartest business moves I ever made.
New LLC if possible