Is there a way a shareholder can move real estate into their current S corp, in order to avoid paying self employment taxes on the profits of flipped houses?

Forum|Forum|6 years ago
December 7, 2019
6 replies
21 views

Shareholder of an S corporation flips houses on the side. Their main source of income is from appraisals in their S corp. They purchase houses to flip in their personal name because they are not able to purchase the properties in their S corporations name. Is there a way they can move these properties into the S corp, in order to avoid paying self employment taxes on the profits of the flipped houses?

Lacerte Tax

This topic has been closed for replies.

Best answer by IRonMaN

"because they are not able to purchase the properties in their S corporations name"

Sounds like you answered your own question with that comment, but why can't they purchase the properties under the corporate name?

C

codeblue123Author

Level 3

Could they quitclaim dead the real estate into the S corp and sell it there? They already pay wages from the S corp and will increase wages if needed.

sjrcpa

Level 15

That's a legal question.

The more I know the more I don’t know.

qbteachmt

Level 15

That's also a good question to ask the Lender, if one exists; and their insurance agency (liability considerations). Why do they want to simply run this data in circles? They are not Changing the total; they are shifting it around and still paying it out of a different place. And have you looked at how the new tax laws treat these types of operation as advantaged or disadvantaged under the new provisions for entity type and operation type? Real Estate is an especially tricky function, now.

Don't yell at us; we're volunteers