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The disadvantage of an S. Corp is that you don't have any flexibility in evening out profit distributions between good years and bad years, right?
by KMag 5y ago
The disadvantage of an S. Corp is that you don't have any flexibility in evening out profit distributions between good years and bad years, right?
- jermaustin1 5y agotechnically true, since every year you take a cash distribution of the profit, BUT you then roll that into the following year and all distributions are tax free... cuz you already paid taxes on it.
- bklyn11201 5y agoThis is correct. If you know the income will arrive in the future, you should aggressively shop banks looking for a line of credit to even out your lumpy income. The interest paid to the bank for the LOC is tax deductible by the business.