Commercial Real Estate Properties

Business ownership comes with many complicated issues, especially when a company chooses to enter into ownership of commercial real estate properties. Though commercial real estate purchase can be tricky, the type of business structure that is outlined in the business plan can help an owner avoid large tax payments every year.

The Limited Liability Company Structure

The limited liability company is generally considered the best option for most small business owners, particularly when it comes to owning business commercial properties. It allows for leasing and loans to be paid out without accruing self-employment taxes, since any income reported for this tax must fall under the actual occupation of the landowner. Assuming the landowner is not in the business of making loans, any rent or lease payments would not fall into this category.

The General Partnership

This form of business ownership spreads the financial responsibility evenly among multiple owners of a business. This includes any real estate or lease income owned under the company name.

The C Corporation

Usually indicated by an Inc. or Ltd. designation, the C Corporation is the most complicated kind of business structure, and will cause the owners a considerable amount of startup costs. The owners of this kind of business are considered separate from the corporate entity, and therefore not personally liable for any taxes or legal fees. Many owners will personally hold commercial real estate while leasing it to their own corporations, providing a personal income separate from that of the corporation.