Question

Advantages of using a C corporation for investing in commercial real estate include which of the following? (Select all that apply)

a. Limited liability for the obligations of the corporation
b. The avoidance of double taxation
c. Separation of ownership and control

Answer 1

The advantages of using a C corporation for investing in commercial real estate include limited liability, avoidance of double taxation, and separation of ownership and control.

Step-by-step explanation:

The advantages of using a C corporation for investing in commercial real estate include:

1. Limited liability for the obligations of the corporation: As a shareholder in a C corporation, your personal assets are protected from the debts and liabilities of the corporation. Your liability is limited to the amount you have invested in the company.
2. The avoidance of double taxation: C corporations have the opportunity to deduct certain expenses, such as mortgage interest and property taxes, reducing their taxable income. Furthermore, if the corporation does not distribute all its profits as dividends, it may avoid double taxation.
3. Separation of ownership and control: In a C corporation, ownership and control can be divided among different shareholders. This allows investors to participate in the profits of the corporation without being directly involved in its day-to-day operations.