Getting Appreciated Real Estate Out of C Corporations (Part II)

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By: Jeramie J. Fortenberry, JD, LLM, WealthCounsel Executive Editor

Part I of this series discussed two strategies to get real estate out of a C corporation: (1) distributions to shareholders and (2) sales to shareholders or other third parties. This article discusses the use of conversions to move appreciated real estate from C corporations into more tax-efficient business structures. A conversion changes the tax classification of the C corporation to either an S corporation or to an LLC. This can avoid double taxation of future appreciation in value and, in the case of subchapter S elections, may avoid double taxation altogether.

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