Discussion:Multiple Tax Questions S Corp vs LLC

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Discussion Forum Index --> Tax Questions --> Multiple Tax Questions S Corp vs LLC

D.taxes (talk|edits) said:

3 April 2008

Hello,

I am trying to find some information regarding the following questions:

-What are the advantages and disadvantages of acquiring a property as a S corp vs LLC? -Can a 401k be rolled into a Roth IRA? -If a S corp started in 2007 and incurred a net loss, can the shareholder carryback the lost starting in 2005 of their personal tax returns?

Thank you for your assistances. I will continue to search my answer through the forum.

Taxwizard (talk|edits) said:

3 April 2008

Question 1 is a legal question. However, do a search on the term "charging order protection".

Question 2: Beginning in 2008, a 401(k) plan can be rolled into a Roth IRA. The entire value of the 401(k) plan must included in gross income in the year of the distribution. Also, the taxpayer’s modified AGI for the year of the distribution must not exceed $100,000.

Question 3:If the shareholder has a net operating loss, he can carry the loss back 2 years. The NOL is computed at the individual level -- not at the corporate level.

LJK CPA (talk\|edits) said:	3 April 2008
Regarding Question 1 - Your client won't get any basis if there is a mortgage on the property inside the S corp (just something to consider)

JR1 (talk\|edits) said:	April 3, 2008
C'mon folks, apparently my training is breaking down. To 1. Just say NOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!! Never in a corp.

KatieJ (talk|edits) said:

3 April 2008

JR's point is that putting property that is likely to appreciate in value in a corporation is generally a bad idea. Why? Because getting it back out may result in a taxable event. The sale of property held in an S corporation, or its distribution to the stockholder in liquidation, generally will result in only one level of tax; but if you want to get it out in some other way, or borrow against the equity in it and distribute the cash, you may end up with a tax liability you didn't expect.

As for the difference between an LLC and an S corp from a liability protection standpoint, a search on just "charging order" may be more effective.