Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Goals, Business Plans & Entities
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 12 years ago,

User Stats

5
Posts
0
Votes
Doug G.
  • Real Estate Investor
  • Elmira, NY
0
Votes |
5
Posts

Help regarding upstreaming of income?

Doug G.
  • Real Estate Investor
  • Elmira, NY
Posted

I am yet to make my first investment- but have been doing my homework and saving, and I'm "almost ready". I work in a secure, full-time employed position, and I love my job. To be clear, I do Not intend to quit anytime soon to run into the real estate investment world. That said, my benefits at work are restricted to what my employer provides.
I learned about defined benefits plans, and how I can create this benefit under certain corporate entities. Then I learned a bit about upstreaming between entities, which, on paper, sounds like a good tax-saving idea. I'm having a much harder time trying to model the tax savings under my circumstance.
Specifically, I don't see how this scenario could work when the bulk of my income still comes from my employment rather than my investments. My job-earned income funds the purchase of assets that are held in a corporation. I've already paid income tax on all the money I'd use to fund any corporate spending (it's all my earned income from my job), so it seems like the second entity is redundant. I'd be upstreaming just to get a write-off to avoid being double taxed on transactions that are passed through an unnecessary second corporate entity. The whole situation would be avoided if I simply had one corporation that owned the investment property and provided a defined benefit plan for it's executive board, wouldn't it?
Can anyone explain to me how upstreaming works in the "real world"? I'm sure there's a way to optimize that flow for non-self-employed people, but I just can't see it yet.
Thanks,
Doug

Loading replies...