Dear Clients and Friends: If you own a building that is rented to your business (self rental) you should consider grouping the two activities together to potentially deduct the self rental losses. If you own 100% of a business as a proprietorship, S corporation, or single-member LLC and you own 100% of the building that is rented to your business as an individual, S corporation, or single-member LLC the “self rental” income is active and losses are considered passive. This means that the rental income cannot offset losses from other passive activities (other rental activities) and the rental losses cannot
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Monthly Archives July 2012
Converting LLCs to S-Corporations
Dear Clients and Friends: The California Limited Liability Company (LLC) fee based on gross California receipts could be costing your company thousands of extra dollars each year. A California LLC paid the following fees based on California gross receipts (this fee is in addition to the $800 yearly minimum tax): Gross Receipts: Equal to or over – But not over – The fee is: $ 250,000 $ 499,999 $ 900 500,000 999,999 2,500 1,000,000 4,999,999 6,000 5,000,000 And over 11,790 In many cases choosing an LLC as a form of doing business is a great choice, LLC’s grant
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Employee Stock Ownership Plans
Dear Clients and Friends: Employee stock ownership plans (ESOPs) are gaining popularity as a vehicle to motivate employees while providing tax benefits to the company and an exit strategy for its shareholders. An ESOP is a qualified defined contribution plan that invests primarily in employer securities. An ESOP gives employees the opportunity to share in productivity through appreciation of the employer stock held in their accounts, and so encourage job performance. An ESOP offers differing benefits to both S corporation and C corporation companies and their shareholders. S corporation benefits: An S corporation can transfer corporate stock to an ESOP
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