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Toofuzzy

11/09/07 11:31 PM

#24900 RE: hookslide5 #24897

Hi Hookslide5

Well most of the gains we make are already at the 15% rate. Also any income passed on to you from the corporation would be taxed either at the dividend rate (also another 15%) or as paid income. Then you also have to fill out the more complicated or pay to have filled out multiple corporate returns.

As the owner of the corporation the corporation better be able to prove that it is leasing those assets at the market rate. What actually MAY make that make sense is that a corporation (or business can depreciate those assets but you wouldn't want to do that with real estate. Real estate you want to own in your own name so you can use the depreciation against your earned income. At least untill you owned a ton of real estate (who needs the headaches just buy REITS within a Roth IRA

A better bet is for arguments sake you spend $1000 / year on electric.

You are in the 33% tax bracket between federal and state.

You can make 5% in a MM account that you have to pay taxes on.

You manage to have $30,000 in the MM account that earns $1,500 and after tax earns $1,000

I can make that tax free!

1) You spend the $30,000
2) You spend it on solar panels so you no longer have an electric bill
3) You now no longer have to pay $1,000 / year for electric AND your savings will increase each year buy the rate the electric rate will go up!

If you left the money in the bank it would cover less and less of the electric bill each year even if MM rates stayed the same!

1)You install a 4000 watt system that costs $32,000
2) In New York State there is a $4 / watt rebate = $16,000
3) In NYS there is up to a $5,000 tax credit
4) There is a $2,000 Federal tax credit
5) $32,000 - $23,000 = $9,000 or $2.25 / installed watt

In NYS one watt produces 1000 watts or 1 kwh / year In Hawai probably more

If you want a 5% return $2.25 / 20 = $.1125 or 11.25 cents

So if your electric rate is greater than $.1125 you can get greater than a 5% return tax free! And you can give the electric utility the bird!

Not Always
Toofuzzy