Taxed As A Sub Chapter S Protection?

HVELIC · #1 (**permalink**) 03-29-2009, 12:09 AM

I Just Formed A New Llc I Own A 7 Family Dwelling And I Was Wondering... Should I Have Elected To Be Taxed As A Sub Chapter S Protection? And If So How Do I Elect It Now? Please I Need Help!

TaxGuru · #2 (**permalink**) 03-29-2009, 10:17 AM

There is nothing wrong in selecting the LLC designation as an incorporated entity. In fact, most of the rental properties are placed into an LLC.

Therefore, your choice of the entity as an LLC is in fact the most preferred choice of entity for most real estate transactions and holdings.

HVELIC · #3 (**permalink**) 03-29-2009, 11:02 AM

Thanks For The Reply. My Lawyer Yelled At Me I Should Have Applied For Sub Chapter S Protection! Does It Really Make A Difference With The Tax Aspect. He Was Going On About Double Taxation And I Thought The Self Employment Tax Is Not That Big A Deal Is It?

TaxGuru · #4 (**permalink**) 03-29-2009, 02:45 PM

There is no double taxation in an LLC! Also, there is no self-employment tax issues with respect to an LLC involved in Real Estate Activity or other passive activities. Perhaps your attorney is not aware of this fact!

In addition, there generally appears the same level of protection between an LLC and an S or C Corporation. So, again, I suggest that you should not be concerned or be worried!

HVELIC · #5 (**permalink**) 03-29-2009, 11:53 PM

Thank You For All Of Your Help. Now I Have Another Issue... I Started The Corporation In March Of 2008. But Through The Year Did Not Operate Under Under Because Nys Lsot Paper Work So Do I Called The Irs And They Said To File A "zero" 1065 And How Do I Do That?