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With either setup you can reinvest all of your cash flow thus reducing your profit to zero and your tax burden to zero.
by harryh 10y ago
With either setup you can reinvest all of your cash flow thus reducing your profit to zero and your tax burden to zero.
- unclebucknasty 10y agoIn theory, sure. But, anyone who has run a pass-through business will tell you that it's a function of timing. If you don't manage to invest it all by the end of the tax year, then it's taxable profit. And, it's nearly impossible to zero out your net by reinvesting it all before some contrived deadline. Even if you could, it is very unlikely that allowing this artificial timeline to drive your investment also happens to represent the best timing or the most efficient allocation of capital.