Posted by JHyre in Ohio on March 12, 2002 at 11:47:48:
Depends on lots of things…if a C-corp is involved, you need to watch interest producing assets…run a search on the main news group for “personal holding company”. Whether the corporate 15% bracket is useful to you depends upon how-long the money will be held in the corp and if/when/how it will eventually make it’s way into your hands. There are LOTS of issues here, more than I care to get into…this is one of those questions that requires a professional analysis of your EXACT circumstances.
I would like to start investing in RE doing quick flips because I figure this is the best way to learn RE. I have another job that puts me in a higher tax bracket. Knowing that doing flips will give me “dealer status” (as opposed to being an investor) from the IRS how can starting a C-corp help in this venture from a tax standpoint?
Example: Let’s say I’m in the 31% marginal bracket and I don’t need cash from the corporation. Could I pay myself a minimal salary and then take the smaller (15%) tax rate a corp gets? Is this realistic? How will this hurt (if at all) later if I decide to start carrying notes or selling on CFD within the corp?