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Silverwheaton
Senior Contributor

S Corp question

Thinking about putting farmland into s corp and also getting ownership via inheritance in farmland that is in s corp.  Do yo have to pay self employment taxes on income from rental real estate activity on a k-1 from s corp if you farm the ground yourself and own the s corp with other family?  I realize I need to go to lawyer and tax accountant but I just wanted to get opinions from those in Ag.  It is somewhat of a gray area.

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4 Replies
sw363535
Honored Advisor

Re: S Corp question

not sure on that one ...  I have been waiting for someone more sure of the tax side.  

I don't think there would be any benefit ,,,, maybe a penalty, by the time the corp pays taxes on the income and you pay taxes on the income from the corp.

As far as the income limit for retirement.. .. not going to work to rent to yourself to change the status of the income....

 

But like you say, a quick answer from the tax accountant will clear it up.

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sw363535
Honored Advisor

Re: S Corp question

The ones I am affiliated with would like to get their ground out of the corp.

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Silverwheaton
Senior Contributor

Re: S Corp question

S Corp doean't pay taxes!  All past down to owners tax returns.

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sw363535
Honored Advisor

Re: S Corp question

After checking the local one i work with is a C corp -- or a regular corporation..

 

Like I said it's not my expertise,  But the question will get a quick answer from a cpa.

 

I'll ask mine when I see him this next month... sent him some depreciation changes today.

 

I wonder if you will run up against a "reasonable rent" test ...... anyway let me know If you get a good answer.

 

I'm curious...... School is getting a long way back sometimes and things change.

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