Corporation

[littlewomanish]

What is the name of your state? Florida
Good morning,
I started a Domestic Corporation in June as a umbrella company. I now want to start a real estate investment company under this corporation. Should the real estate company be created as a LLC or Fictitious Name? Will I need to get another EIN for the real estate company or can I use the one I have for the Corporation? And how would the I be taxed having a Corporation as an umbrella company and then creating companies under it.

[divgradcurl]

Originally Posted by littlewomanish

What is the name of your state? Florida
Good morning,
I started a Domestic Corporation in June as a umbrella company. I now want to start a real estate investment company under this corporation. Should the real estate company be created as a LLC or Fictitious Name? Will I need to get another EIN for the real estate company or can I use the one I have for the Corporation? And how would the I be taxed having a Corporation as an umbrella company and then creating companies under it.

The answer to most of these question will depend on all of the relevant facts of your situation. Your best bet is to sit down with a local attorney, who can review your situation and advise you accordingly.

[DStaub]

As the previous answer said, most of the questions you asked depend upon so many facts that you need to sit down with a lawyer familiar with the tax and liability consequence of the various alternative entities available. However, I can make two general observations:

1. People rarely choose to make investments in real estate through a regular (non-S corporation) because any gain ends up being taxed twice. Although partnerships, LPs and LLPs, as well as S corporations, allow pass-through treatment of gains, in my experience, once the fact are reviewed, the decision in most cases is to use a limited liability company (LLC).

2. If you use any entity other than a single-member LLC (or you simply adopt an assumed name, in which case there is no new entity), you will need a new EIN. A single member LLC is a "disregarded entity" for federal tax purposes, i.e. it essentially is invisible as far as the IRS is concerned although it serves its state law purpose of limiting liability.

DStaub, [URL="http://www.illinoisbusinessattorney.com"]Illinois business attorney[/URL]
Forum posts are for general information purposes only and are not legal advice.

[clueless3]

1) Yes, you can have an LLC to be wholly owned by a Corp.

2) No, you don't need to have another EIN if you don't want to. The LLC can be a disregarded entity, and all profits and losses are filled by the members of the LLC. But yes, you CAN apply for a separate EIN.

3) The Corp-that-owns-an-LLC might not be the best option for you since any asset flowing into the Corp might not be easy to get out without tax consequences.

[Shay-Pari'e]

[quote=clueless3;1547358]1) Yes, you can have an LLC to be wholly owned by a Corp.

2) No, you don't need to have another EIN if you don't want to. The LLC can be a disregarded entity, and all profits and losses are filled by the members of the LLC. But yes, you CAN apply for a separate EIN.

3) The Corp-that-owns-an-LLC might not be the best option for you since any asset flowing into the Corp might not be easy to get out without tax consequences.

We are in the year of 2007. This post is 3 months old.