S-Corp or C-Corp.. Which is better for real estate?

[SeattleCPA]

You know what I'd suggest? Call a local CPA and ask to buy an hour of time. Then, bring in your questions and go over them with the CPA.

As long as you get someone who understands real estate and this LLC vs S corp stuff--people often call this "choice of entity"--you'll get great value for the $200 or whatever you pay for the hour. And now's a good time to make an appointment because (hopefully) people are done with tax season.

BTW, just so you know I'm trying to be objective about this, I am not angling for this billable hour. I'm not taking on new clients these days.

[phatman5]

I have an meeting next week with one that a friend recommended. However, I am distrustful of CPA's lawyers etc, in the same way I am contractors. I feel like they just want to make their money and be done.
I don't know what I should be asking when I meet with the CPA to find out how qualified they are and knowledgeable about real estate related things.

[mcwagner]

so in a regular llc rental income even with two people in the llc does not have to pay SE taxes on it?

but for flips in an llc you do?

pass-thru income from an entity to an individual generally maintains its character when passed thru.  passive partnership income remains passive to the partners. ordinary income (flips) remains ordinary and subject to SE.  some exceptions, but this is generally the case.

How to pick someone?  Ask lot of questions.  Listen for answers.  Watch out for the "one size fits all" and "I have all the answers" mentality.  There are lots of options and each of these has pros and cons.

[SeattleCPA]

I think with professionals, it's sometimes not what you pay but the value you get.

In fact, I tell prospective clients that I want them to see me as expensive. But I also tell them that they need to be able to look at the value I deliver and clearly see they get, e.g., a way better return on what they spend on me than they do on just about anything else.

Example: I want them to look at the $2K bill, think, "Geez, that's expensive...," then think some more and say, "But gosh he's saving me around $8K a year."

I said this someplace else, but one of the problems or challenges in working with real estate investors is that they often don't pay much in income taxes. Predictably, as a result, they don't see a lot of value (or get a lot of value) in high-quality tax planning advice. So why buy good accounting?

And before you think, well, why doesn't some smart CPA figure out how to serve these people, think about this. To be fair, the CPA can often go spend his or her time serving a large multiple state professional services firm and semi-regularly deliver regular tens or even hundreds of thousands of dollars tax savings.