401k Business Financing

Should my ROBS C corp hold real estate in a separate LLC?

October 28, 2022 | By George Blower

Rollover as Business Startup FAQ – Should my ROBS C corp hold real estate in a separate LLC?

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ROBS 401k FAQ: Holding real estate in a separate LLC

QUESTION:

To help with taxes, it’s been suggested that the property I purchase be in an LLC and then the C-corp can pay rent to the LLC. Is that allowed?

RESPONSE:

From a ROBS 401K perspective, the property may be held in an LLC that is 100% owned by the C-corp (which means that the LLC can’t be taxed as an S-corp because an S-corp can’t be owned by a C-corp).  You will need to discuss with your tax advisor whether having the real estate held in a 100% sub LLC of the C-corp will eliminate any tax benefit.

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About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>

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