LLC is a pass through entity

[Paraman]

One of the advantages of an LLC is the fact that it is a pass through entity. This means you can take advantage of the long term capital gains advantages.

If you hold your properties in a corperation, you could lose the long term advantages, and still end up paying the full capital gains when the property is sold.

A good CPA can help you decide how to structure your business. Even if you are just starting out, it makes sense to have someone look over your plan before proceeding. I would rather pay $500 now, than lose $100,000 later by structuring a holding company the wrong way!

[aloysiuscarl]

It's best to use a pass-through entity like an LLC taxed as a partnership. That means all income and losses passes through to your individual tax return; where you pay taxes. No taxes are paid on the entity level, except some minimum stealth taxes due in most states. If you form a single member LLC to operate your existing business, you should transfer all the assets and liabilities of the existing business to the LLC. Since the single member LLC is ignored for federal tax purposes, the transfer has no tax consequences.