Sounds to me like you got advice from a tax pro who's primary purpose is to make money, and serving the needs of their client in the best interest of their client, comes second. I'm the tech industry also as a single member LLC with a computer consulting business. I have no need for the additional protections of an S-Corp, as my registration as an LLC does me just fine. The chances of me being sued are so small to non-existent, it's just not worth the cost, time and paperwork required for an S-Corp. Additionally, at $600/year for my business liability insurance, it's significantly cheaper than dealing with S-Corp costs which can be quite expensive in this state. With my current LLC setup, the only "time" involved, is however long it takes me to write the check to the insurance company each year.
Now for rental property, if you have rental property and are looking to put it into your LLC, that *WILL* be expensive to do. Remember, since your LLC is treated "like an S-Corp" it has to "act" like an S-Corp. That means that in order for your LLC/S-Corp to own the rentals, either the mortgager has to agree to the transfer of the mortgage from you to the LLC (and I can tell you right now, the lender will never agree to this), or you will have to literally sell your rentals to the LLC/S-Corp. Good luck getting your LLC/S-Corp to qualify for a loan from a "descent" lender in this state. If you do, the interest rate will be high.
Finally, when completing the 1120-S for the S-Corp, the rental income is still passive and still gets reported on SCH E as a part of the 1120-S.
But instead of doing all that crap, why not look at your rental dwelling policy to confirm the amount of liability insurance? In this state, I guarantee you that it's $300,000 at an absolute minimum. If that doesn't give you the level of "protection" and comfort desired, then you can increase that liability coverage to $1M for less than an additional $100 a year. I use Heritage Insurance for my rentals, here in FL. Also, for rental or business insurance of any kind, stay away from the big names, like State Farm, Farmers, AllState, etc. They're absolute price gougers in this state. THey also try to "scare" you into staying with them by flashing the BEST ratings in your face, and talking about things like capital on hand. If they start talking that stuff to you, then it's time to get up and walk out of the agent's office. Just don't buy into all that crap.
Overall though, as TaxGuyBill says, you should seek the advice of a CPA or Tax Attorney in your local area. But don't deal with just one. Go see several TA's and CPA's, leading each to believe they're the first one you are talking to, ask them the same questions and compare notes.
ALso, after talking with professionals on this, you can confirm the information they provide you by starting at the sunbiz site at <a rel="nofollow" target="_blank" href="
http://www.sunbiz.org">http://www.sunbiz.org</a>. From there, I am able to find any law, rule, regulation and statute that may apply to my business or my rentals. I can still remember when I was first researching this before starting my SCH C business. Either 4 of the 5 CPAs I talked with outright lied to my face, or they honestly didn't have a clue about the laws in this state.
The most important four words you will ever say to a tax attorney or CPA are, "SHOW ME IN WRITING."
