Discussion:Is self employment income avoided with this structure...
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Bretsharon (talk|edits) said: | 28 February 2006 |
| Dear List,
Is self employment income avoided with this structure? (A) Clients receive reasonable salary from a partnership, for which they work. (B) Partnership's 99% limited partner is a corporation, either S corp or C corp. (C) That Corporation then is wholly owned by clients. Corporation has no real business but to hold the investment in the partnership, and shareholders' receive nominal salary. (D) the 1% General Partner is a grantor trust whose beneficiaries are the client Isn't the SE taxable income eliminated on the profits left in the partnership? | |
Cataxpro@cox.net (talk|edits) said: | 6 March 2008 |
| Absolutely correct. Basically any 1099 I/C who doesn't do this is paying taxes unnecessarily. | |
| 6 March 2008 | |
| you avoid SE tax, but pay Corp tax.
then pay tax again when $ is taken out of corp. is that smart? | |
| March 6, 2008 | |
| And think of the legal and accounting fees! When all you needed to do was bifurcate the LLC interest. Geez. I use that word intentionally so that you can search on it and find the link. There's an easy way out. Yours ain't it. | |
