Owning an S corporation that holds a rental property as its primary or sole asset is a common structure for individuals seeking to manage their real estate investments efficiently. However, one of the primary concerns for owners of such businesses is what happens to the property when they pass away, especially regarding the tax implications for their heirs.
If your business operates as a regular C corporation, it’s crucial to be aware of the accumulated earnings tax (AET). This lesser-known tax can pose significant financial risks, and failing to navigate it properly may lead to hefty penalties. Understanding the ins and outs of the AET and finding tax solutions to mitigate its impact can protect your corporation from unnecessary financial burdens.
