Limitations of using an S-Corp for Real Estate Projects
Although we have had some projects set up as an S-Corp, the LLC structure seems to be more appropriate in most situations for owning real estate. These are some of the limitations with an S-Corp:
the entity can have no more than 100 shareholders
none of the entity's shareholders can be nonresident aliens—that is, noncitizens who don’t live in the United States
the entity has only one class of stock—for example, there can’t be preferred stock giving some shareholders special rights, and
none of the entity's shareholders are other corporations or partnerships.