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C-Corp Accumulated Earnings Arbitrage

Trap earnings in C-corp at 21%, invest, defer personal tax.

Overview

C-corps pay flat 21%. Accumulate earnings inside (up to reasonable business needs — $250K safe harbor, more with documentation) and invest through the corp. Deferral compounds. Watch the Accumulated Earnings Tax (§531) — need documented reinvestment plans.

Best fit
Cash-generating C-corpsInvestors wanting entity-level compoundingFounders pre-QSBS
Estimated impact
Defer 15–24% personal tax layer indefinitely

Click Generate advisory deep dive for mechanics, IRC citations, a step-by-step execution plan, a worked numeric example on your profile, costs, risks, and this-week actions.

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