For foreign buyers and investors in Miami, it is better to open a US corporation

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Here I will discuss the C corporation and the S corporation and how each legal structure affects income taxes, ownership, and dividends and distributions. It is not expensive and can be done quickly. The benefits to foreign buyers and investors are enormous. Since a US corporation has a tax reporting requirement, it is exempt from automatic withholding tax on captail gain upon sale of property. As a US company, the coporation can benefit from depreciation and tax write offs, which would not be permissible to a foreign citizen owning US property in his or her own name. There are also major tax benefits in Estate Planning.

Income Tax

The manner in which a C corporation is taxed versus an S corporation is an important consideration. C corporations are stand-alone entities while S corporations are pass-through entities. This means that a C corporation will be taxed at the corporate level (as a stand-alone entity) and at the shareholder level, while in an S corporation the tax passes through the corporation straight to the shareholder. Losses in an S corporation also pass through to the shareholder and this allows them to offset losses with other income. Losses in a C corporation may be offset by past or future corporate earnings.

Ownership

Due to tax laws, an S corporation is not allowed to have more than 100 shareholders. In addition, these laws require that shareholders in an S corporation be U.S. citizens or residents. An S corporation is further limited in that it can only issue one class of stock, which gives each shareholder the same liquidation and distribution rights. On the other hand, a C corporation can have an unlimited number of shareholders, the shareholders may be foreign to the U.S., and can issue multiple classes of stock which provides the shareholders with different liquidation and distribution rights.


Dividends and Distributions

A dividend is corporate income that is distributed to the shareholders of the corporation. S corporations and C corporations do not receive deductions. Since C corporations are stand-alone entities, the earnings are taxed on the Corporate Tax Return and must also be included in the shareholder's personal tax return. This means that the earnings are taxed twice. In an S corporation, distributions made to shareholders are only taxed on the shareholder's personal tax return.

Conclusion, not legal advise, most likely for you, my reader, it will be "S" or "LLC" for all the reasons stated above.