DO NOT Put Your Rentals In an S-Corp...Here's Why

[@melyraps]

Notes 📝 from video: - Don’t put property in S-Corp because if you want to take out the property it will trigger a taxable event aka large tax bill for you. - Don’t put property in S-Corp because after death, beneficiaries have to pay capital gains tax because of lack of “step up in basis” (when property is re-valued at a higher price). Options to do instead: - Use an LLC for rental properties which will receive “step-up in basis” for shares, of which there is an unlimited (unlike corp). - recommendation is to have each property in their own LLC for liability purposes. If you get sued, only that property is affected. - Speak to tax planner. For most real estate investors (landlords) an LLC is usually best, but for developers, flippers, brokers, or wholesalers an S-Corp might be best. Video summary starts at 16:55 in the video.

[@TheMoesoliman1]

Thank you

[@NinjaVanish247]

👑

[@michiganpowerwashingpros9093]

thank you

[@ghostwriter991]

Thanks young king

[@jamestheproexpat]

You are the MVP

[@richhands5269]

My three favorite channels: Karlton Dennis, Stock Brotha, & Richard Fain. Make my week complete!

[@kstevenson3504]

Dude! Who has this much detail in a video??? NOBODY!!! Every video is a degree!! You are super thorough man!

[@chrisrupple1842]

I don’t leave comments very often. Wow thank you for making these videos. I am taking over a family business and your videos have been helping me so much to wrap my brain around all of this. Great job on your videos clear and concise. 💯👍🏻

[@edmak2228]

Please do a video about creating a holding company

[@Sunnysun228]

Yo, I love your videos man. I don’t think anyone has ever made taxes so easy to understand and entertaining!

[@MrHunt79]

You have helped me with my business structure more in two short videos, than two different tax professionals have helped me in six months!

[@Panjwanilife]

What if you're doing a 1031 exchange?

[@LuisAlvarado-io9ow]

The question I have is what if you own "ABC LLC" but it is a S - Corp but your S - Corp owns your real estate business "XYZ LLC" as a normal LLC. How would the taxes work out, pro's and con's? Thank you.

[@sairascapes]

This is all great information! What about holding companies, would someone need a holding company for all of these assumed accounts? Example: So if you own a brokerage as an s-corp, a construction company as an s-corp, 10 rental properties under separate LLC's, would you need a holding company? If so, would that be under an LLC or an s-corp? Maybe a continuation video on this would be more helpful. Thanks for all of your hard work and knowledge, we really appreciate it!

[@user-wm2yn4jj1t]

Not to mention that when you do that(transfer ownership to an llc) at least in Florida and get a deed you’ll be liable for documentary taxes , especially in the case of refinancing , there is a case out there on the issue , but most transferors have a mortgage on the property and do it because some refinance company which wants you to own it under an llc status .

[@Redoma2012]

Thank you for making it so easy to understand.

[@DudeNasty]

Great stuff! Been working through your material. Unfortunately, but grateful I’ve recently inherited some properties. Your videos are extremely educational and well laid out. Thank you truly!

[@ghostwriter991]

Y unfortunately

[@ShudrodWatts]

put the houses in a trust...kill the suspense

[@lHurtYourFeeIings]

This is the best honest video on the subject.

[@RochX-7]

Thanks again for the invaluable insight KD. Adding new information daily.

[@mTechPenn]

I got to this video because you ended a video talking about buying real estate with your s-corp was a great idea. What am I missing?

[@miltonwoodson702]

Very informative thanks

[@richard9827]

Really helpful thank you. I’m considering an S-Corp now. I didn’t know about not getting the stepped up basis.

[@Lisa-nt7wt]

Great video ! Question: Karlton what do you think about putting a LLC into a Trust for added protection ?

[@DD-xz1ec]

I have heard of putting properties under a holding company and have the LLCs run the business and own nothing. Does this actually work?

[@zayworldwide222]

KEEP GOING BRO. It was enough music, enough bible study, enough Quaran, i love it bro. PODCAST TOO! 3 thumbs up

[@J.WinstonCPA]

An LLC is a legal structure not a tax structure. You can have as many "shareholders" as you want in an agreement, but that does not translate into any type of entity unless the person elects it. And there are limitations. Good info.

[@daynescott1]

Hi, if my primary residence is in a living trust, but I’m going to be renting out my primary residence soon, do I still need to create an LLC for it now since it will be a rental? Or is it still fine if I only leave it in my living trust? Thanks in advance for the help!

[@SelinaSherise]

Thank you, I need help, I'll be clicking on your link. Thank you for your knowledge l, it was was well said and simple to understand.

[@angeljiminian5305]

always use land trusts then you can sell the land trust

[@richardvillanueva6304]

What if your S corp owns the LLC?

[@Inphinityproductions]

What about trust

[@d.e.brenner2930]

Thanks Karlton great and amazing information. Besides the LLC what structures and/or methods permit a step up in cost basis to a heir or beneficiary ( partnership, living trust, LLC, probate, C-corp, etc)?

[@wsmaga]

Great information. I definitely needed to hear this. I have long term rentals. I need to get in touch with Karlton.

[@splatterdaynightmares]

woah back up. are royalties and digital products sold after the fact passive income??? advertising income? youtube videos? books? are those passive income? I did a bit a research. I was hoping it was taxed at a lower rate but I guess it is all the same. darn it.

[@user-sg7yr7lj1b]

How can I lease my rental property to my Partnership, LLC or my managing C-Corp Company if I do not use the whole property as business, only use one room to do my administrative books and business?

[@mariaalejandraacero-escude4640]

Thank you, what a great video!

[@bob.bobman]

Are we taking llc vs scorp OR llc vs llc taxed as a scorp?

[@hynoon3357]

121 exclusion eligible rental that I want to remain the landlord. Is my only option to sell to an newly created S corp in order to keep it and take advantage of 121? I realize the step up in basis and liens may get complicated.

[@cassiebrunson1590]

❤❤❤ This was extremely helpful. I may need to take him up on that quick comp call 😂😂😂

[@elaminb1]

Excellent info!😊

[@heartstrings110]

Is this a change? I thought an S-Corp was preferable?

[@CommentGawd]

A S corp is more ideal for flippers?? That doesn’t right when it’s harder to transfer out than transfer in

[@mannodean]

If I run a developpement company and I build many duplexes what would be the best strategy ?

[@ellenoir5678]

All this information is key 🗝️

[@aldoavina8886]

What's better or is there a difference between having separate LLC's for multiple properties and having them all in one with a series LLC?

[@Anonyme67]

LLC is mainly there to protect your personal assets from lawsuits or bankruptcy. Meaning if you a have a multi-unit and you get sued you might lose everything. But if you put each floor or each unit in different LLC you won’t lose everything.

[@chrisdsmithnewcovenantente876]

Question: if i am considering rolling my properies into an LLC, Corp. or S-Corp doesn't the propertis have to be legally liable for the loan? Oppose to simply owning the properties and filing as one of the established entities. . .

[@tudo290]

Great video Thank you

[@eriksoncherilus7508]

Are short term rental like Airbnb considered passive or active income?

[@williamsanchez5343]

Hi. William from Houston TX . Good job . Can you please recommend a strategic CPA on this area . Thanks.

[@stoickes]

Great video 👍

[@bronzeguard7455]

Brother, you are good

[@nadiakalantarova1687]

When does your next tax free challenge open up!!?!

[@generationalcursebreaker]

Can you do both.

[@itsaboutcheese1465]

Thank you!

[@yourcalicocat]

3:55 bro your drawings...

[@robhtp3817]

When should Renters begin an LLC? The day after they move out?

[@robwin0072]

If SCorp are filed on the 1120s; then what form is SMDE LLC filed? If it's Schedule C or Schedule E, I was told the SMDE LLC filing a Schedule C would trigger SE Tax (15.3%).

[@lHurtYourFeeIings]

SMLLC rental files Schedule E. It is a disregarded entity for federal purpose.

[@NateSecor]

Does this apply to an llc that chooses to be taxed as an s Corp?

[@viewtifullyvon6465]

I wanted this answered too.

[@chainscdmc]

Second that question

[@sanfranmissionbullies4924]

Thank you 🙏🏽

[@empress_me]

Thank You

[@amcdonald8048]

Hola Karlton, I saw your video regarding having a rental property prior to setting up an LLC or any other corp. My question is planning on rental after my mortgage has been paid off at the end of this year. How may we transfer the property to be covered by the business?

[@bobretband]

Excelente video.

[@MrMCProduction1]

Hey Karlton , is it possible to change your s-corp to a llc? If so how would you go about this and what would you recommend?

[@joecarreon]

So wat if I have an LLC taxed as an scorp?

[@theelect777]

The step up in Basis is taken away from the property, but applied to the shares of the s-corp. they essentially pass the shares of the business which get stepped up

[@lHurtYourFeeIings]

That is useless. The corporate properties will still have a gain to report at time of sale, which is taxable to the shareholders through the K1. The "value of the s-corp stocks" to the shareholders have nothing to do with the appreciated gain of the real estates which are corporate assets. And good luck selling your S-corp shares at appreciated value, the marketable value doesn't increase when the balance sheet stays at purchase price. What stepped up? lol

[@armanzakeosyan8191]

Is work authorization holder can be an S Corporation shareholder?

[@zom91]

@karltondennisofficial - awesome content as always, but what about having property LLC's under an s-corp? Thanks

[@bebin73]

Why would you do that? Are you wanting an umbrella llc?

[@dchakma1987]

If the rental property (Airbnb) on my name but the operation is under S- Corp; on that case is it a taxable event if property is on living trust for children?

[@lHurtYourFeeIings]

As long as you are personally titled on the property, it gets a stepped up. As long as the S-Corporation owns nothing.

[@natalieverdugo9614]

I am interested in a consultation with you Karlton. I have 2 offices in the socal area. I believe my Cerritos office is the closest to your office. Please provide me consultation information and availability. Thank you in advance

[@seanmclaughlin7415]

What about a C-Corp? Or is it the same concept?

[@lHurtYourFeeIings]

Never put real estate in a C-Corp. Double taxation.

[@seanmclaughlin7415]

@@lHurtYourFeeIings Even if it is used as a holding company? And only this? The capital gains tax upon selling is intriguing.

[@lHurtYourFeeIings]

@@seanmclaughlin7415 Don't put assets in a C-Corp. Period.

[@yourcalicocat]

I STARTED AN S CORP CAUSE YOU TOLD ME BRO WTHHHHH

[@napman57]

😂

[@yourcalicocat]

@@napman57 karlton messed me up, but for real, i was nowhere near ready to getting to real estate game

[@user-jw2cf9ip2u]

The Rich will go down as well as the Poor👀👀👀👀

[@_bazzmuhammad]

💎 💎 💎 💎