S Corp Prep Assist

Technical topics regarding tax preparation.
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23-Apr-2020 8:02am
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Good Afternoon - Thank you for the forum.. I'm 1new here...looking for insight

I have a client who I took over while they were in the midst of an audit a few years ago. The premise is this ..

Realty Co = 1120S .. originally 1 owner
Contracting Co = dba originally 1 owner = realty co. bought was used to buy properties / contracting co was used to rehab/maintain properties and do property preservation work for foreclosures.

IRS decided to merge them into 1, with the 1120 - S being the parent company and putting the dba as a subsidiary of such.

2 Owners - not married at that time but now are. Both the 1120S and the individuals own real estate rentals.

.... currently, the formed a new llc for all the real estate owned and want to transfer tax free to the new llc ..

So I'm lost here ...
1- 351 exchange allows this ... But does it matter if new llc is a disregarded entity (another subsidiary) of the original 1120S or if its a partnership with the 1120S, and both individuals as partners ?

2- Given that the newly formed entity is strictly for properties held and bought/sold flips ... can I aggregate rental l properties into one activity on the form 8825 or do I still need to list them separately ?

And advice and insight is truly appreciated ...
 

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