Home Buying in 03103>Question Details

nosoupforyou…, Home Buyer in Manchester, NH

S-Corp to purchase real estate

Asked by nosoupforyou111, Manchester, NH Mon Jun 18, 2012

Hello. I am considering purchasing a condo or sfh on an all-cash basis (under 175k). My question is that would it be better to buy this under an S-corporation, which I use for computer consulting business or to purchase it as an individual. The cash I would be using would be from income generated this year from the business.
Also, I currently do not own a home so I would live in the home I purchase for at least a few months and possibly use it as rental income sometime later. Any responses would be appreciated.

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Answers

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There are pros and cons to both. If you are living there you should want to take advanatge of the tax benefits it being owner occupied. If it is going to be a rental, then you mnay want the company or perhaps a seperate realty trust not connected to the company. The best bet is to as a lawyer who can break down the benefits, pros or cons of each for you. If you would like some help finding a property, please let me know. i would love to help you.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Aug 28, 2012
Very good investment strategy and good question but you are asking it to wrong group of people. Real Estate agents would not give you good suggestion on questions like this. All they know is THIS IS GOOD TIME TO BUY (if you are a buyer) and THIS IS GOOD TIME TO SELL (if you have a property to sell) no matter when it is and where the real estate market is heading, either its 2006, 2008, 2009 or now in 2012. Oh! Another point they like to make is Tax benefit of mortgage interest but when you ask how much the benefit will be they will refer you to contact a tax accountant.

Back to your question, since you are buying the property with cash, you do not have to worry about getting a mortgage and have more options to choose from. You can buy the property under existing s-corp or establish a new one just for the property depending on what you are trying to do. If you are just trying to defer taxes on the cash generated from s-corp and do not worry about legal or future tax implications of being a landlord to your computer consulting S-corp, I believe you can buy the property under the s-corp and rent it. However, I would suggest you to do some research on LLC and open an LLC with your existing S Corp being the primary investor and buy property under LLC so that the S-corp can avoid being a landlord and pass that responsibility to the LLC and still be the investor of the property.
Disclosure: I am not an attorney or accountant but a Homebuyer waiting for a GOOD TIME TO BUY with some background in accounting and taxation.
0 votes Thank Flag Link Tue Aug 28, 2012
Nosoup,

Best to consult an attorney or accountant for this question. Beware of any agent that might try to answer it without having either of the credentials listed above. If you would like referrals to either of these, feel free to drop me a line or send me an email and I can forward them direct. Good Luck!

Regards,
Jason Duval, REALTOR, CRS, ePRO
Licensed Broker in NH & MA
Keller Williams Realty
603.765.3239 C
603.232.8280 O
0 votes Thank Flag Link Mon Jun 18, 2012
This is a question for your accountant and your Attorney:
Realtors do not give Legal advice.
There are too many unknowns here.

Good luck and may God bless
0 votes Thank Flag Link Mon Jun 18, 2012
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