BUSINESS: Who should own our business building?

BUSINESS: Who should own our business building? Question: Should my corporation own our business building or should I own it personally? Answer: If your business is incorporated, it is often a good idea to personally own the real estate occupied by your corporation. If appreciated real estate is sold by a regular corporation, the gain will be subject to double taxation if the corporation distributes the money to you. However, if you own the real estate personally, there is no double taxation. Though the double taxation does not apply to S corporations, there can be problems when an S corporation sells its operating business and its real estate. If you personally own the property, you can lease it to the corporation. There are non-tax advantages of personal ownership of business real estate as well. Discuss the facts with us and your attorney before you buy business real estate or change the form of ownership on real estate you already have.

IMPORTANT NOTICE: To ensure compliance with Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this message was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

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