On Dec 11, 12:36 pm, GoogleGro...[at]rivloon.net wrote:
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You really do need a new accountant and an education about taxation!

First, changing the type of entity will NOT solve your problem. If
the items are deductible by an S Corp they are just as deductible by
an LLC or even a sole proprietor.

Second, you may be reporting things incorrectly (assuming I've
interpreted your post correctly). If you're engaging in short term
real estate deals - and I assume that means you are buying and selling
real estate - that activity belongs on a Schedule C for a SMLLC NOT on
Schedule E. If you're not engaging in the short term purchase/sale of
real estate exaclty what are you doing that you classify as short term
deals?

Thirdly, health insurance paid by an S Corporation on behalf of a 2%
or greater owner gets the same tax treatment as if it were paid by a
sole proprietor. The premium is considered income and is reportable
on your W-2 then you get to claim an adjustment to income for self
employed health insurance, assuming you have net income from the
business.

Fouth - retirement programs are pretty much available across the board
to just about any type of entity. There is at least one program - an
HR plan, often called a KEOGH Plan - that is available ONLY to self
employed persons. And self employed can be Schedule C, Schedule E,
Schedule F, or a member in an LLC or a partner in a partnership.
Otherwise, just about any business can set up a defined contribution
or defined benefit plan.

As you're already realized, you need a tax professional that is
experienced with planning and willing to work with you. One of your
options is to go to www.naea.org - the National Association of
Enrolled Agents, Federally Licensed Tax Professionals - and search for
an EA in your area. I am not sure whether the AICPA has such a
referral section on their web site. But you definately need a planner
to work with.

Good luck,
Gene E. Utterback, EA, RFC, ABA

<GoogleGroups[at]rivloon.net> wrote
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And why not? If you are "in the business of".....this activity, all
legitimate "ordinary and necessary" expenses are deductible. A Single
Member LLC (SMLLC) is taxed as a sole-proprietor on Schedule C, deduct your
business travel, etc there.







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Any previous year's expenses belong in those previous years. Amended
returns may be in order though.






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You'd have to be an employee of the business for any of that to apply at
all......

Then health insurance is not a deduction for hte "S" corporation. It falls
though, to the front of the 1040 deductible in full (for greater than 2%
shareholders).







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There are differing rules for the types of pensions. All though are based
on **EARNED** income - so net profits from self-employment or partnership
activities, and wages from your "S" corporation.

Yes, your spouse can be an employee of the business. Husband and wife
shareholders fall into the same trap for the > 2% shareholder rules as to the
deductibility of health insurance...see above for how that gets handled.






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If you take an existing LLC and elect corporate tax treatment, then elect
"S" status, it's probably going to be effective for next
year....2008....right.

Remember that the election with the IRS does not change the legal entity as
the state sees it (so you're still an LLC by state law). Talk to a
competent attorney about the laws of your state and how you might be
impacted by your plans.




--
Paul A. Thomas, CPA
Athens, Georgia

I have several LLCs I use for my real estate investment business. I
want to designate one--let's call it "LLC-S"--that I use for short-
term deals to be taxed as S corp, since I pay ordinary income tax
rates on those deals anyway. But I cannot really deduct non-basis
expenses (like travel to properties, some are far away) related to
those on a Schedule E like I can for my rentals, so as of now, I just
don't deduct them at all. If I file IRS 8832 today, am I still able to
deduct expenses (like the pricey seminar I attended in November)
relating to "LLC-S"s activities that occured earlier this year or even
in previous years? These are expenses I haven't figured out how to
deduct. My CPA is no help, she just plugs my numbers into her software
and gives me the results, and won't advise me (yes, I know, I'm
shopping for a new one now).

Once so designated, can my "LLC-S" buy health insurance (an HSA?) for
me, or is that deduction only for C corps? I understand insurance may
be counted as income to me. What kind of retirement benefits may be
deductible to "LLC-S" if I put $ into a retirement fund (IRA? 401k?)
for me? What if I hire my wife (or even make her a partner in the
LLC), can I deduct her insurance too, and/or have "LLC-S" contribute
to her existing IRA?

Finally, I have a couple of recently-bought properties I want to deed
into "LLC-S" before I sell them. Should I do that before or after I
elect S corp taxation from the IRS via form 8832? Any advice is much
appreciated, thank you!