One of the strategies we discussed in our Taxmageddon webinar was using a C Corporation. As soon as I brought up that strategy, we got deluged with questions. Here are a few that came in after the webinar was over.
The Taxmageddon webinar is up at our Insider’s Club right now. If you’re not yet a member of the Insider’s Club, you can join for just $9.97 per month. You will receive regular online video and audio training, webinar replays PLUS 10% discount from all USTaxAid products. Go here to listen to the full 60 minute webinar now.
Here is a question on C Corporations that we received after the webinar.
“My question is that can I have a C-Corp to hold my appreciating assets while I have two s-corps businesses, which would lease those assets from the C-Corp? The reason being I didn’t know if the IRS would consider the C-Corp as a holding company. If the IRS did consider my C-Corp as a holding company then my other two s-corps would automatically designate to C-Corp and LLC sole member which I don’t won’t because I like the wages / distributions I received.”
Answer: First, we don’t like having a C Corporation own appreciating assets because you don’t get a capital gains special rate when you sell within a C Corp and you can deal with a double taxation issue on a liquidating dividend.
There is the additional issue with setting up a C Corp that does nothing but collect passive income such as interest, dividends, royalty and passive rental income. There is an extra tax for that.
For more information on C Corporations, you may want to check out“Tricks and Traps of C Corporations“.