Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

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?

Highlighted
Level 2

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?

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 15

"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?

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

0 Cheers
6 Replies 6
Highlighted
Level 2
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.
0 Cheers
Highlighted
Level 15
That's a legal question.

ex-AllStar
0 Cheers
Highlighted
Level 12
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.
*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
Highlighted
Level 15

"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?

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

0 Cheers
Highlighted
Level 15

Even if they could, they'd have to take wages from the S Corp - which are subject to social security and Medicare taxes.


ex-AllStar
0 Cheers
Highlighted
Level 15

No. 


ex-AllStar
0 Cheers