Quote:
Originally Posted by Tommy
It sounds like your saying the way to pay no taxes on a corporation is to spend all the profit. So if I have $1,000 profit... I spend $1,000 and show $0 profit, thus no taxes. Is that what you are saying? That's simple accounting 101.
Or is there a grander scheme you know of where you can avoid corporate taxes without spending all the profit?
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OK, let's look at the larger scene here!
"Spending" does not mean spending money like a little kid at the ten-cent candy store!
What we want is for the corporation to end up with little or no cash on hand at the end of the tax year but this lofty goal does not necessitate blowing money like a drunken sailor!
Let us say that your corp has $300K in the bank. Nice but the corp is going to have to pay some tax.
Let us also say that you need a new house.
Resolve for the corp to guy the house for cash and then lease the house to you.
Or sell you the house on a registered contract.
Let us say that the corp needs a vehicle for corporate use.
Resolve that the corp buy a vehicle for use in corp biz by the biz agent, i.e., you.
Or that the corp buys the car and then leases it you you.
There are other examples; dozens, in fact!
"Spending" does not mean just emptying the corp account for the sake of emptying it!