She misunderstood Cost Basis, and reported only cash paid, and not total purchase (even if some is a mortgage). That's a tough lesson to learn.

For an S Corp, there is a Reasonable Wage (payroll) requirement. That would be one functional reason real estate ownership would not be held by an S Corp. Did you really want to turn rental income into Payroll? Another is how the S Corp entity structure is "owned" by the shareholders. The people don't own the property, so there is no provision for death of a shareholder for step up of basis or some of the tax deferred strategies (most times, any movement of that property will trigger capital gains tax).

For holding the property, there obviously needs to be operations taken into consideration. An S Corp might be operating as a building contractor who also does flips. Or, an S Corp is the property management firm for the Real Estate held by an LLC.

You can google it.