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Corp's, S-Corp's, and LLC's
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LLC v. PA

For a one-owner, single-surgeon practice starting in Florida with the expectation of owning real estate within the first 5 years of practice, what is the recommended corporate structure? LLC with S-corp election or PA. Does the recommendation change if the plan to build and own an office in the future never comes to fruition. Thanks.

Zip Code: 32505

Re: LLC v. PA

Great question.

For starters, you definitely want to work with a CPA and an attorney from your state, since all states have quirky rules. Most professionals know the federal rules, the rules for their state, and maybe the rules for some of the surrounding states.

That being said, most healthcare professionals who have a practice and also own property do so using separate entity. Doing so keeps your practice, your real estate, and your personal assets all separate, and offers you better liability protection than owning everything personally, or holding your practice and the real estate in the same entity. There are also advantage when you sell your practice down the road to holding the real estate outside the practice entity in case the Buyer does not want to purchase the real estate or you don't want to sell it at that time.

For the real estate, it seems that most people go with the LLC. These entities were introduced by Statute by each state during the late 1990s and seem to be the best option for an entity.

For the practice, most people go with an S-Corp or an LLC. There are pros and cons to both. You can always start with an LLC, and then have the LLC elect to be treated as an S-Corp down the road by filing a Form 8832 (http://www.irs.gov/pub/irs-pdf/f8832.pdf).

I did write an article for MDTAXES back in July 2012 called "Choose the Best Entity for Your Practice" available at: http://www.mdtaxes.com/news0712.html.

Hope this information helps you out.

Zip Code: 01801