Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-11-2017, 10:47 AM   #21
Recycles dryer sheets
 
Join Date: Sep 2010
Posts: 63
Quote:
Originally Posted by pb4uski View Post
Unless the equipment and car is used exclusively for business then you're going to have to prorate the cost between business and personal (just like any sole proprietor).

But even if you can deduct it all then you're paying 35% corporate tax on that $46,500.


Yea, I think that's where I need to learn more about the businesses, pay or dividend myself enough to live off and keep everything else in the business.

Also, health insurance through the business seems advantageous.

I was hoping someone on the site is doing something somewhat similar.
__________________

__________________
green night is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-11-2017, 12:24 PM   #22
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,575
I have thought about it, but mostly to get earned income and be able to fund a IRA or Roth IRA while retired. Perhaps also get the 50% match for people with low income (assuming the trading did not generate significant income above that level). 50% match to your Roth means you start out very ahead of the game.

I assume if you are a trader it is earned income?
__________________

__________________
Fermion is offline   Reply With Quote
Old 01-11-2017, 01:11 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,124
Quote:
Originally Posted by Fermion View Post
I assume if you are a trader it is earned income?
AFAIK, if it's earned income there's no way to avoid paying Social Security tax.
__________________
GrayHare is online now   Reply With Quote
Old 01-20-2017, 08:32 AM   #24
Recycles dryer sheets
 
Join Date: Sep 2010
Posts: 63
A couple adds and question:

First, again thank you for all the advice and comments.

In the business, I think ill buy a condo or townhouse that my kid can live in during college and use as an investment for other renters and especially longer term.

Can I keep all earnings in the business? For example if I make $100k on stock prices rising and dividends, rent, etc. I don't need to show any income from the business correct? I can continue to rollover paper gains etc over time, correct?
__________________
green night is offline   Reply With Quote
Old 01-20-2017, 11:53 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 14,931
Not sure what your question is but if the business doesn't distribute income to you then you would not have any income... however, technically the business would have to impute the value of your kid's use of the condo and that would be income to you, just like any corporation who pays for the personal expenses of owners or executives... on other words, the benefit that you receive by having the company house your kid would be income to you and compensation paid by the corporation.

No such thing as a free lunch.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is online now   Reply With Quote
Old 01-20-2017, 02:31 PM   #26
Full time employment: Posting here.
 
Join Date: Jun 2016
Posts: 931
Quote:
Originally Posted by green night View Post
A couple adds and question:

First, again thank you for all the advice and comments.

In the business, I think ill buy a condo or townhouse that my kid can live in during college and use as an investment for other renters and especially longer term.

Can I keep all earnings in the business? For example if I make $100k on stock prices rising and dividends, rent, etc. I don't need to show any income from the business correct? I can continue to rollover paper gains etc over time, correct?
You won't show income, but the business will.
__________________
COcheesehead is offline   Reply With Quote
Old 01-21-2017, 06:37 AM   #27
Recycles dryer sheets
 
Join Date: Sep 2010
Posts: 63
Quote:
Originally Posted by COcheesehead View Post
You won't show income, but the business will.


This may seem like a dumb question but let's say through some stock transactions the business makes 200k, can the business just pile back in with more investments? It doesn't have to show the gains in that year does it?
__________________
green night is offline   Reply With Quote
Old 01-21-2017, 06:50 AM   #28
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Second City Land
Posts: 23,261
Quote:
Originally Posted by green night View Post
This may seem like a dumb question but let's say through some stock transactions the business makes 200k, can the business just pile back in with more investments? It doesn't have to show the gains in that year does it?
You really need to get professional tax help for this.
__________________
MichaelB is online now   Reply With Quote
Old 01-21-2017, 06:56 AM   #29
Full time employment: Posting here.
 
Join Date: Jun 2016
Posts: 931
Quote:
Originally Posted by MichaelB View Post
You really need to get professional tax help for this.
+1
I will tell you that after running a business for 20+ years, the government always gets their share. Remember that saying about death and taxes?
__________________
COcheesehead is offline   Reply With Quote
Old 01-21-2017, 12:12 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 12,627
Quote:
Originally Posted by green night View Post
This may seem like a dumb question but let's say through some stock transactions the business makes 200k, can the business just pile back in with more investments? It doesn't have to show the gains in that year does it?

Why would you think you would not have to show gains
__________________
Texas Proud is offline   Reply With Quote
Old 01-24-2017, 07:59 AM   #31
Recycles dryer sheets
 
Join Date: Sep 2010
Posts: 63
Quote:
Originally Posted by Texas Proud View Post
Why would you think you would not have to show gains


I was thinking that if I carryover the gains in a new investment then I wouldn't... it's my understanding that if I sell a house at a profit then buy a new one at a higher cost, one doesn't need to show the gains?

I guess I thought the same concept applied but that's a big assumption.
__________________
green night is offline   Reply With Quote
Old 01-24-2017, 08:27 AM   #32
Full time employment: Posting here.
 
Join Date: Jun 2016
Posts: 931
Quote:
Originally Posted by green night View Post
I was thinking that if I carryover the gains in a new investment then I wouldn't... it's my understanding that if I sell a house at a profit then buy a new one at a higher cost, one doesn't need to show the gains?

I guess I thought the same concept applied but that's a big assumption.
I think you are confusing a few issues. When you sell an investment for a gain, the gain is either ST or LT. You can use losses to offset those, but if you roll a gain into another investment, the gain has been captured already.

Your house example could be a 1031 exchange, but that is a whole other animal. You really need a lawyer to pull that off.
__________________
COcheesehead is offline   Reply With Quote
Old 01-24-2017, 08:38 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,204
Quote:
Originally Posted by green night View Post
I was thinking that if I carryover the gains in a new investment then I wouldn't... it's my understanding that if I sell a house at a profit then buy a new one at a higher cost, one doesn't need to show the gains?

I guess I thought the same concept applied but that's a big assumption.
I think you are talking about a very old tax dodge that was done away with years ago. Now if you sell a primary residence, you have a $250K ($500K for a couple) exemption on the profit. But that only applies to a primary residence. As COcheesehead said, for a rental or second home you can do a 1031 exchange to delay paying tax on the gains, but that definitely requires professional help. And none of that applies to stocks.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 01-24-2017, 10:57 AM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 12,627
Quote:
Originally Posted by green night View Post
I was thinking that if I carryover the gains in a new investment then I wouldn't... it's my understanding that if I sell a house at a profit then buy a new one at a higher cost, one doesn't need to show the gains?

I guess I thought the same concept applied but that's a big assumption.


The home ownership was a special case for individuals.... not for corporation... and it was only for your primary residence... if you had a second home it did not apply...

Basically think that if you sell anything at a profit you might have to pay tax on the profit and you will be in a better place than you are now.... you might have some exceptions here or there, but the default should be 'it is taxable'....
__________________
Texas Proud is offline   Reply With Quote
Old 01-24-2017, 08:54 PM   #35
Recycles dryer sheets
 
Join Date: Sep 2010
Posts: 63
Ok, thanks all!
__________________

__________________
green night is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Incorporate two rental properties with children BillNOVA FIRE and Money 6 06-19-2015 04:53 AM
Trading your account tbone FIRE and Money 43 03-19-2012 05:10 PM
internet trading account DLS1 Stock Picking and Market Strategy 6 10-10-2008 07:35 PM
Anyone keep a lot of money in their checking account? daverph FIRE and Money 29 12-16-2006 01:24 PM
incorporate to protect assets? TallCotton Other topics 52 05-23-2005 08:56 PM

 

 
All times are GMT -6. The time now is 04:43 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.