@originaldohnthornton: A lot of accountants push S Corps as the “ultimate” tax strategy.
Why?
To reduce self-employment tax.
Great.
But that’s a half-measure.
Because the S Corp is still a statutory law structure creating taxable events the entire time revenue flows through it.
And here’s the even bigger problem:
S Corps have stock.
Which means they don’t work well in conjunction with a contract law spendthrift trust strategy.
That’s why sophisticated operators often use an LLC structure instead.
Then they make the contract law spendthrift trust a minority member of the LLC.
Now massive amounts of taxable income can potentially be moved from the LLC into the trust through K-1 distributions — without triggering taxable events inside the trust.
Meanwhile, the trust provides powerful lawsuit protection, far greater privacy, and no public state registration like LLCs / Corporations.
Same business revenue.
Completely different tax strategy.
(Info purposes only; not a licensed tax, legal, or accounting professional) #taxdeductions #taxreduction #taxsavings #SCorp
