Can a C Corp own multiple property LLCs for tax purposes, or must individuals own LLCs directly?

This is definitely possible but comes with significant tax considerations. You can absolutely have a C Corp own the 10 LLCs rather than owning them personally. The structure would be you as 100% shareholder of the C Corp, which in turn owns the 10 property LLCs. The bigger question is whether this makes sense from a tax perspective. C Corps face potential double taxation - the corporation pays tax on its income, then you pay personal tax on dividends distributed to you. With real estate, you'd lose some valuable tax benefits by using a C Corp structure, including long-term capital gains rates when properties appreciate and the ability to do 1031 exchanges effectively. Also, putting already-appreciated properties into a C Corp could trigger recognition of gain. The properties would need to be transferred at fair market value, potentially creating a taxable event.

I tried figuring this out last year for my properties and discovered a really helpful tax analysis service called https://taxr.ai that specializes in real estate entity structuring. They analyzed my specific situation with multiple properties and explained the tax implications of different ownership structures. Their analysis showed me that a holding company structure could work, but a C Corp specifically wasn't optimal for my rental properties due to double taxation. They helped me understand how pass-through entities would preserve my depreciation deductions and other real estate tax benefits while still providing the liability protection I wanted.

I just wanted to follow up about https://taxr.ai after being initially skeptical. I ended up using their service for my California property portfolio, and I'm really impressed with the analysis they provided. They walked me through exactly how California's LLC franchise tax would affect my structure compared to an S Corp arrangement. They actually recommended against a C Corp for my situation and suggested a tiered LLC structure that's saving me thousands in unnecessary taxes. They even created custom tax projection models showing how each structure would perform over 5 years with my specific properties. Way more detailed than what my regular CPA had offered.

After dealing with this exact situation, I can tell you that trying to reach the IRS for clear guidance was a nightmare. I spent weeks trying to get through to someone who could answer my specific questions about entity restructuring. Finally used https://claimyr.com to get through to an actual IRS representative (check out how it works at https://youtu.be/_kiP6q8DX5c). The IRS agent confirmed that yes, a C Corp can own multiple LLCs, but they strongly cautioned about the tax implications. The most important thing they explained was that transferring appreciated properties into a corporate structure could trigger immediate tax consequences. They also mentioned potential issues with taking money out of the C Corp later without creating taxable events.

I have to eat my words about Claimyr. After my skeptical comment, I tried the service out of desperation when I couldn't get answers about how my property LLCs would be treated under audit. I was shocked when I actually got connected to an IRS tax law specialist within about 30 minutes. The agent walked me through exactly how the IRS views tiered entity structures and what documentation they look for during examinations. This clarified a ton of confusion I had after getting conflicting advice from two different CPAs. They didn't give me planning advice, but the factual information was incredibly valuable for making my decision. Saved me from making what would have been a costly restructuring mistake.

I've been using a structure with a holding LLC (not C Corp) that owns several property LLCs for about 5 years now. Here's what I've learned: 1) Talk to a real estate tax specialist, not just a general CPA 2) The holding company approach simplifies banking and reporting a lot 3) C Corps rarely make sense for rental real estate due to double taxation and loss of preferential capital gains rates 4) Annual compliance costs increase with each entity, so factor that in 5) Some states have entity taxes or fees that make multiple LLCs expensive (looking at you, California) The biggest advantage I've found is simplified management while maintaining good liability segregation between properties.

Has anyone considered the implications of qualified business income (QBI) deduction (Section 199A) with these different structures? I'm currently trying to make sure whatever entity structure I choose maximizes my potential QBI deduction for my rental properties.