No. of Recommendations: 3
Here are my thoughts on this section of your response Scot--

In the meantime, having been involved with a few small corporations (either as an owner or manager), I'd say that the answer to your question all depends. For a sole owner operator, looking to either A) buy and flip; or B) run a few properties as rentals, and where in neither situation do you expect to draw a paycheck, it doesn't make sense to use a C Corp, since the only way to get the profits out of the corporation and into your pocket is to take a dividend. The C Corp will first get taxed on its earnings, then you will get taxed on the dividend. Very bad on a scale of good to bad.

If I wanted to minimize my taxes (in the ST) wouldn't I be in the best shape if I used a C corporation and ran all the profits through that? This way I would only pay 15% taxes on the first 50K, whereas with an S or LLC I end up paying my current rate (already 28% and only going up). Then I can keep the profits and re-invest them into more properties. And keep 13% more of the profits because of the taxes. Perhaps even more if I pay myself a small salary, but keep my personal income in the 28% range. I don't need the profits for myself in any way so they can just keep rolling over in the business. This is one of the reasons why I think a C corp might be the best choice for me. Although books specifically say "Don't use a C corp for Real Estate".

Perhaps I'm off base??

Confused Matt in KC
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