Discussion:Real Estate Professional/S-Corp
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Discussion Forum Index --> Tax Questions --> Real Estate Professional/S-Corp
| 9 January 2007 | |
| An S-Corp buys commercial property to renovate in order to lease/rent it. It then buys a residence hoping to restore it and rent out but subsequently (after 13 months) sells it for a gain. If this is all the company does, is the company considered to be a real-estate professional in which case the gain is really just ordinary income? | |
Www.cpa1.biz (talk|edits) said: | 9 January 2007 |
| I see the property as an income producing asset. You are in the business of renting property not selling it. I would consider it a capital gain.
Maybe someone else can respond more to this... Bj | |
| January 9, 2007 | |
| I agree, and I'd also suggest that you stop using a corp to do this. Bad things can happen, and you'd rue the day that you had RE inside a corp. Do your next deal as an LLC. | |
| 9 January 2007 | |
| JR,
would you expand on the above caveat. What makes a corporation a bad choice for RE? Thanks. | |
| 9 January 2007 | |
| As a point of information, I don't believe a corporation can be a real estate professional. The test applies at the individual level. | |
| January 9, 2007 | |
| Pacdallas:
You might want to look at this page for more information on this subject: Real Estate in a C Corporation. - Tim Doyle, TaxAlmanac Moderator - Talk to me 14:03, 9 January 2007 (CST) | |
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