All Forum Posts by: Bob Sackameno

@Linda Weygant wow thank you so much that was extremely informative. I'm trying to figure out why I've heard people say C corps are bad for holding property. My rationale is that I am at the highest tax bracket, any income I receive will be taxed at 35%.

If I hold in an LLC or S-corp, 100% of my income is taxed at 35% (plus employment tax). I don't need the cashflow now, so I feel like this is wasted.

If I hold it in a C-corp, I would presumably not take any distributions for some time (rolling cash into new investments). Therefore, my thought is that I would only pay tax on income at 15%? I've also heard that you can create an LLC for your labor services and deduct it from the C corp as a business expense, thus reducing the double taxation on salary if I needed it.

I don't have an issue with the administration I've managed nonprofits before so don't have an issue with the corporate bureaucracy if it will save me significantly in taxes.

Thank you for your time.

Was looking at potentially building some multi-generational homes on single family home zoned lots. Does anyone have any experience on what constitutes a single family vs multi-family house?  I know that I can rent a 3 bedroom house to 2-3 different people. Can I build a house that has a granny flat and side entrance and rent it to two different people and still consider it a single family home? What specifies that the house is multi-family (eg a duplex) vs a single family home with multiple rooms?

Is it a full kitchen, side entrance, detached garage, etc? If for example, it was a side entrance and oven that made it considered multi-family, what would stop you at permitting from covering up a doorway and leaving out an oven and then coming back after the permit and adding the door and oven?

I have a job where I make good income, I'm in the highest bracket with my regular wages. I'm about to start buying some rental properties and am not excited about the prospect of all of my business earnings being taxed at the highest tax bracket (or paying self-employment tax).

Because of this, and the fact that I'm just getting started so most of the income is going to go back out to the business for quite some years, I'm looking at a C corp so that I can retain the earnings in the business and not be fully taxed on rental income.

My question is regarding how C corps are taxed in regards to income. To make things easy, if I buy a 100% financed property (0% equity) and my expenses are $500/month, and my rent is $600 a month, at the end of the year I have $1200 in income. If I roll this $1200 into an equity payment on the loan for the same property, do I still pay corporate taxes on it? What if I roll it into a down payment on new property, is it still taxed?

What if I build a property and have instant equity. Do I pay taxes on that equity gain or only after I sell it? I guess I'm trying to find out how much I can keep reinvesting in the business without paying corporate taxes and what's considered "income." Ideally I would not distribute any dividends or salary for several years as I would want to continue growing the business and won't really need the money for personal use.