Real Estate Entity Structuring For Rental Portfolios
Expert tax planning and advisory services from AE Tax Advisors.
AE Tax Advisors provides comprehensive real estate entity structuring for rental portfolios services for high-income professionals and business owners. Our approach combines deep technical knowledge of the Internal Revenue Code with practical, real-world application.
How We Help
Every engagement begins with a thorough analysis of your current situation. We identify opportunities, design strategies, and work with you year-round to implement and monitor your plan.
Who This Is For
This service is designed for individuals and businesses earning $500,000 or more annually who want to take a proactive approach to tax planning.
Frequently Asked Questions
Should real estate be held in a separate entity from operations?
Usually yes. It isolates liability, creates a clean platform for depreciation and cost segregation, and produces rent taxed once without payroll tax. The tradeoff is the self-rental rule of Reg. 1.469-2(f)(6), which is generally addressed with a grouping election under Reg. 1.469-4.
Can I change my entity structure later?
Often, but not always cheaply. Converting an LLC to S-Corp taxation is straightforward, while unwinding a C corporation or removing appreciated real estate from one can be expensive. The cost of reversing a structure should be weighed before adopting it.
Which entity structure is right for my business?
It depends on profit level, asset type, ownership, and exit plans. An LLC taxed as a partnership suits real estate and businesses needing special allocations; an S election suits profitable operating businesses above roughly $80,000 of profit per owner; a C corporation suits capital-intensive growth aiming at a Section 1202 exit.
What is a pass-through entity tax election?
It allows a partnership or S corporation to pay state income tax at the entity level rather than passing it to owners. The entity-level tax is deductible federally and is not subject to the individual state and local tax cap, restoring a deduction that would otherwise be lost.