What's Your Type?
Buying business real estate? The legal entity you choose could make a big difference in your tax bill.
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While location will always be important when buying real estate,tax experts say don't neglect to carefully consider the type ofbusiness entity you select to own that property. That'sright-for business real estate, you should choose a businessentity that will help you save on taxes.
It's almost never a good idea, for example, to use acorporation for the real estate you expect to own in your businessbecause it will likely cost you plenty in taxes, says MauryGolbert, a partner with the New York City accounting and advisoryfirm Berdon LLP. As you know, with a corporation, earningsare subject to double taxation. First, the corporation pays taxeson income, and then after-tax income is taxed again when it'sdistributed to shareholders in the form of dividends. Thecorporation must also pay state and city taxes in manyjurisdictions on income from rental real estate.
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