It is impossible to get cash out of a C-Corp with out double taxation. If they would make dividends tax free distributions, the C-Corp would be a wonderful thing.
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Some states (like michigan) still tax s corps - state income tax. Small business in MI gets no break, and consequently, it is the only state in the US with a large net outflow of u-hauls.
Now lets all wrap our minds around this. If you were to form a C corp and an S corp, and have the s-corp own all the stock of the c-corp I believe a dividend disbursement from the c to the s is tax free. If the s owns like 20% of the c, 70% of the dividends are tax free. That dividend income can then be paid as salary to the shareholders of the s-corp.
Tho im sure there is some tax code around that too…
[quote]Beowolf wrote:
Without slashing the military, this is basically all just putting us deeper into debt.
Yay.[/quote]
2/3 of all spending is cast in stone — spending that can’t be altered without causing whoever is in power to be booted out for sure. The old people have specifically designed the system to milk the young people out of money, and any politician who goes near things like SS, Medicare, the Prescription Drug Program, is simply looking at seniors booting him/her out.
To slash this spending then, only an authoritarian government with a monopoly on military force could do so with impunity. It therefore follows that no politician will slash the military. He or she may need them in the event of chaos and disorder as the herd stampedes for their ‘benefits’.
Nope, rigid and extreme price controls, which allows for unlimited printing of money to pay for all the benefits, is definitely in the cards. This will cause massive shortages and the end of the Republic, since the military will keep order.
The capitalist era is ending. The military/authoritarian era is just beginning.
[quote]Sloth wrote:
Gee. I wonder which present group of people are more dangerous to the next couple of generations of Americans. Islamic terrorist, or this generation of spend and debt happy Americans.
We’ve debated Seccesion here a couple times. If was born a generation or two from the present, I would be all for it. Get a couple states to agree to it, and then basically tell the older generation and the federal government “Screw this! You people and your oversized government did this. You’re not passing off your debt to us. We take no responsibility for your irresponsibility. Therefore, we’ll be going our own way. Dig yourselves out of your own mess.”
Sorry, but this isn’t the country a revolution was fought to establish. This is crazy.[/quote]
But once you agreed to join the Union, you’re not allowed to leave if the Federal government keeps up its end of the deal. Just because it destroyed your currency and is making every effort to encumber you with debt levels that no slave on a Caribbean plantation of the year 1710 would tolerate, it kept up its end of the bargain!!!
The S-corp doesn’t pay its own income tax, but when you take money out of it you’re subject to individual income tax.
And I’m getting out of my sweet-spot knowledge-wise, but isn’t it true that an S-corp is like a partnership in that it can’t hold income year-over-year? So that would be an inefficient structure, in that you’d be subjecting the dividends to individual tax rates at the level of the owners of the S-corp, rather than at dividend-tax rates (and the double-taxation is still there, because the C-corp still paid tax on its income before it made the dividend).
C-Corps can have no more than 35 shareholders, S-Corps must have fewer than 100.
?
C-corps have no limitations on the number of shareholders. All public corporations are C-corps. I haven’t had to form an S-corp in a few years so I yield to rainjack’s superior knowledge on their current limitations.[/quote]
I have very little idea what I’m talking about - I’ve had one Business Associations class. I thought C-corps meant a closed corp., although apparently that is a tax status. Sorry.
It is impossible to get cash out of a C-Corp with out double taxation. If they would make dividends tax free distributions, the C-Corp would be a wonderful thing.
Some states (like michigan) still tax s corps - state income tax. Small business in MI gets no break, and consequently, it is the only state in the US with a large net outflow of u-hauls.[/quote]
Texas has a corporate tax as well. It’s called a “franchise tax”. We just have no personal income tax. I will defer to you on tax treatment at the state level.
[quote]Now lets all wrap our minds around this. If you were to form a C corp and an S corp, and have the s-corp own all the stock of the c-corp I believe a dividend disbursement from the c to the s is tax free. If the s owns like 20% of the c, 70% of the dividends are tax free. That dividend income can then be paid as salary to the shareholders of the s-corp.
Tho im sure there is some tax code around that too…
[/quote]
It is still taxed twice. Once at the corp level, and then again at the personal level as ordinary income.
The least punitive way is just to declare the dividends to the shareholders, and have them pay at the personal level at the reduced dividend tax rate.