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Originally Posted by freeadultcontent
Yeah, its all part of maintaing that viel. If you skirt the rules it is alot easier to pierce and have it seen just as a tax shelter and when that happens your fucked.
I would assume it is the same everywhere, but I am speaking from a California perspective.
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It's not a tax shelter as eventually i'll have to pay taxes when I pay myself dividends. Also banks won't loan your company money unless it's sole purpose is real estate, which my other business isn't (internet marketing obviously)
So company A would basically pay dividends to company B and since that money's already been taxed on the corporate level there's no need to tax again. I can invest the remaining 100k or pay myself and only have 60k to invest.
Either way, i'm the sole owner of the shares.