Hi guys, looking for some general guidance here. I am the sole owner of a company that is now essentially a holding company since the product lines were all purchased by another company. The company has a lot of cash and is investing it and paying me out over many years. I`m considering buying a recreational property and deciding whether to have my company buy it.
The recreational property is a planned community that also includes rental management so it could be rented out fairly easily to cover property taxes / condo fees etc but its primary use would be for use by my family / friends.
The price is roughly $500K and would be paid in cash by the corporation
I know there are some potential issues with running it through the corp such as any income made (or is it profit?) is taxed at a high rate however my personal tax rate would be the same I believe so don`t think that is an issue. Once the property is sold I believe taxes on profit are higher but the plan would be to hold on to this fairly long term.
I see the biggest advantage is purchasing this with before tax money - to purchase this myself I would have to bonus out roughly $850K, pay tax and then the remaining amount would be used to purchase myself but when done through the company it is simply a $500K transaction.
If anyone has any knowledge in this area or can point me to someone who can help it would be appreciated
Thanks,
The recreational property is a planned community that also includes rental management so it could be rented out fairly easily to cover property taxes / condo fees etc but its primary use would be for use by my family / friends.
The price is roughly $500K and would be paid in cash by the corporation
I know there are some potential issues with running it through the corp such as any income made (or is it profit?) is taxed at a high rate however my personal tax rate would be the same I believe so don`t think that is an issue. Once the property is sold I believe taxes on profit are higher but the plan would be to hold on to this fairly long term.
I see the biggest advantage is purchasing this with before tax money - to purchase this myself I would have to bonus out roughly $850K, pay tax and then the remaining amount would be used to purchase myself but when done through the company it is simply a $500K transaction.
If anyone has any knowledge in this area or can point me to someone who can help it would be appreciated
Thanks,