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Because this is common practice. The business owner my dad worked for "leased" the building and warehouse from his son.
by anotha1 5y ago
Because this is common practice. The business owner my dad worked for "leased" the building and warehouse from his son.
- detaro 5y agoOwner is a relevant point. If you funnel shareholder/co-owner money to you that's a problem, if you entirely own the company that argument goes away.
- anotha1 5y agoYeah, probably not unethical from that standpoint. My dad seemed to think it was some sort tax avoiding inheritance scheme. I guess my question would be, is there a point where it does become illegal even if there was an individual owner? Is there a threshold where leasing at higher than market rate becomes illegal?
- lotsofpulp 5y agoWhy would it be illegal to pay yourself more than market rate? In the US, you typically want different entities owning the real estate versus the ones operating the business for liability and tax purposes. The IRS treats owners' basis differently based on whether the income is due to passive (real estate rental) or non passive activity (operations).
- anotha1 5y agoWhy? Idk that's why I'm asking. And your comment didn't help clear anything up other than getting across that you are obviously superior in the field of tax law. Thanks.
- Anarch157a 5y agoWasn't that one of the issues with WeWork, the company leasing estate owned by it's founder ?
- noetokyo 5y agoIt doesn't make it any less shady/unethical.