>>With the new dividend tax cut, an S-corp can pay almost all its profits in dividends and avoid tax altogether.<<
Give me a break. Now you are grasping for straws. IN a S-corp "all" profits are passed through to the shareholders. One may think of it has a dividend but technically it's not as if you keep those profits in the corp they have already been allocated and taxed and are part of your estate whether a dividend has been declared or not.
I can assure you they will not eliminate the taxable dividend payout of an S corporation. Even the rabbit tax cutters would have to put something else in it's place. While I would like to never have to pay taxes on those payouts I would look in the mirror and say I was selfish. I'd get over it but feel guilty just the same.
sly, i think your partially right. the part about being taxed at the individuals rate is correct; however, whether the s-corp pays the profits out or not is immaterial. and, if i'm not mistaken, the monies received are considered distributions and i'd be surprised if the new proposal actually contemplates exempting those monies from taxation. if, in fact thats their intent, my next phone call will be to my tax attorney!(GG) LEON
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