They are added to the cost of the property.

Has anyone discussed with you the ramifications of holding rental property in an S Corp entity?

No. That has not been brought up. I am following the prior year taxes and how the client purchased the home. What are the pitfalls?

S Corps require Payroll for the employees in this business for the work they perform. That's the first problem I like to point out.

@sjrcpaon a similar topic, provided this info:

"Never put real estate in a corporation.

Also most RE deals are structured so that someone gets more than their ownership % of cash distributions, income, etc. Can't do that in an S Corp."