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P
Polk
Level 2
March 5, 2020

S Corporation Deductions for Closing Costs

  • March 5, 2020
  • 2 replies
  • 11 views

When an S Corp purchases a residential rental property are the closing costs deductible as an expense on form 8825?

    This topic has been closed for replies.

    2 replies

    IRonMaN
    IRonMaN
    Level 15
    March 5, 2020

    They are added to the cost of the property.

    Slava Ukraini!
      qbteachmt
      qbteachmt
      Level 15
      March 6, 2020

      Has anyone discussed with you the ramifications of holding rental property in an S Corp entity?

      Don't yell at us; we're volunteers
        P
        PolkAuthor
        Level 2
        March 6, 2020

        No. That has not been brought up. I am following the prior year taxes and how the client purchased the home. What are the pitfalls?

        qbteachmt
        qbteachmt
        Level 15
        March 6, 2020

        S Corps require Payroll for the employees in this business for the work they perform. That's the first problem I like to point out.

        @sjrcpaon a similar topic, provided this info:

        "Never put real estate in a corporation.

         

        Also most RE deals are structured so that someone gets more than their ownership % of cash distributions, income, etc. Can't do that in an S Corp."

        Don't yell at us; we're volunteers
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