C-corp reinvests profits at 21% flat vs pass-through 37% top rate — 16-point rate arb per dollar retained.
Post-TCJA, C-corps pay a flat 21% federal rate. Owners retaining earnings for growth/reinvestment (not distributing as dividends) compound wealth at 21% tax drag vs. 37% for pass-through owners in top brackets. Watch out for: (1) Accumulated Earnings Tax at 20% on retained earnings >$250K ($150K for PSCs) without documented business need, (2) Personal Holding Company tax if 60%+ passive income, (3) double tax on eventual dividends/liquidation (mitigated by §1202 QSBS). Ideal for capital-intensive, reinvestment-heavy businesses aiming for a QSBS exit.
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Front-load depreciation on real estate to slash current-year taxes.
Turn W-2 income into tax-free passive rental losses.
Defer capital gains indefinitely by rolling into bigger real estate.
Defer + eliminate capital gains via OZ funds.
Rent your home to your business up to 14 days/year — tax-free.
Deduct 20% of pass-through business income.
Slash self-employment tax on profits above ~$50K.
Expense equipment, vehicles, and property in year one.