MUST Have Family Management Company - Boris Musheyev, Tax Advisor

Does it make sense to create a family management company to hire my child? I have an S corp.

With respect to C-corp management companies for S-corporations and partnerships. does the former even make sense, or would you be stuck paying salary from the S-corp even though you are also getting salary (and, presumably, tax-free fringe benefits) from the C-corp? I've also read that for the latter you have to justify what you're paying the management company. Is that true? I would think that any agreed upon payment (guaranteed payment if a partner, simple contract if not) is ok, plus if the underlying income of the partnership is not subject to self-employment tax (real estate rents or trading) diverting income to a c-corp partner or manager creates a payroll tax burden that didn't exist before. Increasing your tax burden, one that gets larger the more income being diverted, doesn't seem like an obvious tax dodge to me, but perhaps the IRS sees it differently.

TCJA setting the minimum C-corporation tax bracket to 21% instead of 15% really reduces the value of income diversion. The Federal government as usual only sees national or multi-national corporations and ignores the small business. A 15% bracket conditioned on net corporate AGI would be really helpful for small business but I can't see Congress doing it due to their aforementioned blindness. The 15% bracket wasn't even inflation indexed, which is another problem Congress likes to create (see NIIT, ACA wage surtax, home sale exclusion, social security benefits tax).

this is a great video

The family management company makes a whole lot of practical sense.

Will a FMC take the passive income of rentals and turn it into non passive and if you get a loss offset other gains?

I own 3 rental properties and I report rental activity on Sch E. If each property pays me a management fee I can set up a Family Management Co and report that income on Sch C, Profit and Loss from business? It’s only me who operates the rentals at this time

Hi- can your office contact me? Want to know if I can set up a family management company through you. Thx

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Thank you for the video!!! We learn a lot from you! Thank you!

What about a cafe, well its a cafe karaoke and lounge? Will it be wise to set up a management company for it?