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Dealing With Real Estate in S Corporations  

Author:  Matthew E. Rappaport.

Source: Volume 36, Number 03, Spring 2019 , pp.31-54(24)

Journal of Taxation of Investments

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Limited liability companies (LLCs) currently represent the best available choice of entity for investment real estate because of their state- law benefits and tax flexibility. Taxpayers who formed real estate holding entities prior to the enactment of LLCs in their local jurisdiction (or who are the heirs of others who did so) are likely stuck with S corporations, which are unfavorable vehicles for real estate holdings under present tax law. This article details the problems with owning investment real estate through an S corporation and addresses several alternative methods to deal with these problems.

Keywords: S Corporations, real estate, freeze partnerships, Qualified Opportunity Zones

Affiliations:  1: Falcon Rappaport & Berkman PLLC.

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