Hi everyone,
I am a highly tax-efficiency motivated investor because to me taxes are like the anti-compounding interest that kills your investment. I've been reading threads on and off on this forum for a while now and have also always known that I would eventually invest in real estate, however I am unsure of the best way to structure the investments and have been researching and trying to come up with tax-efficient ways to invest in real estate. So far I've failed to discover a really good way to do it...
I am currently the sole owner of a c-corp that will profit approx 600/700K this year, which I am expecting to grow to 1M next year. My fiance and I are relatively frugal and would much rather invest most of that money in to our future than spend it now. I would like to purchase a commercial property within the next 1-2 years (to operate out of) and also to lease the additional space for income. The problem is, it would most likely require a couple of years to produce the down-payment I would need to purchase say a 5 million dollar piece of commercial real estate. But that would mean that every year I would be hit with the 21% corp tax rate. Is there a way to somehow stash away the extra profit from the c-corp in some sort of investment vehicle and then access that money to purchase the commercial property a couple of years later?
As an example, since I am the sole owner of the c-corp, can I construct some sort of retirement investment fund that I could contribute 500K to every year (thus pre-tax), then use this retirement investment fund to down-pay the commercial property I want in a couple of years?
Or could I leave the profit in the corporation but not realize the gains on paper until the day I'm looking to make the downpayment for the property? (would much rather do the former, if possible though because don't want to risk having a bunch of money stuck in the corporation if I don't have to)
There must be a more tax-efficient way to buy a commercial property to operate out of for my corporation. Does anyone know how it would be possible?
I am a highly tax-efficiency motivated investor because to me taxes are like the anti-compounding interest that kills your investment. I've been reading threads on and off on this forum for a while now and have also always known that I would eventually invest in real estate, however I am unsure of the best way to structure the investments and have been researching and trying to come up with tax-efficient ways to invest in real estate. So far I've failed to discover a really good way to do it...
I am currently the sole owner of a c-corp that will profit approx 600/700K this year, which I am expecting to grow to 1M next year. My fiance and I are relatively frugal and would much rather invest most of that money in to our future than spend it now. I would like to purchase a commercial property within the next 1-2 years (to operate out of) and also to lease the additional space for income. The problem is, it would most likely require a couple of years to produce the down-payment I would need to purchase say a 5 million dollar piece of commercial real estate. But that would mean that every year I would be hit with the 21% corp tax rate. Is there a way to somehow stash away the extra profit from the c-corp in some sort of investment vehicle and then access that money to purchase the commercial property a couple of years later?
As an example, since I am the sole owner of the c-corp, can I construct some sort of retirement investment fund that I could contribute 500K to every year (thus pre-tax), then use this retirement investment fund to down-pay the commercial property I want in a couple of years?
Or could I leave the profit in the corporation but not realize the gains on paper until the day I'm looking to make the downpayment for the property? (would much rather do the former, if possible though because don't want to risk having a bunch of money stuck in the corporation if I don't have to)
There must be a more tax-efficient way to buy a commercial property to operate out of for my corporation. Does anyone know how it would be possible?
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