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Small Business Real Estate Purchase

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Money Talk > Taxes

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xk49
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Small Business Real Estate Purchase  Reply with quote  

Company "X"(S-Corp) grosses ~600k in revenue per year.
~90% of revenue is paid out in wages to the two co-owners.
Owners are currently taxed at ~33%
Company "X" currently leases space for ~24k year

Hypothetically:
Can company "X" buy a stand alone office space and use all(most) the revenue taken in to do so? Co-owners will take no salary.

Anyone have an idea on what type of general tax liabilities are going to be incurred at the corporate level? How much is going to be saved by not paying the 33% personal?

Company "X" doesn't plan on selling the asset, just looking to redirect monies into some channel other then personal income.

I know company "X" needs to speak to a CPA, but was wondering if anyone had a personal situation like company "X".
Post Mon Feb 25, 2013 4:11 pm
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oldguy
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The new asset shows up on 'X's" balance sheet - probably taxed at the corp rate of about 35% (depends on state). And then you depreciate the asset at about $20,000/year (going forward, that deduction approximately offsets the $24,000/yr lease expense that you have now).
Post Mon Jun 24, 2013 1:43 pm
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pezlindalo
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A real estate purchase and sale agreement is a relatively short and straightforward contract that you can expect to sign if you are either buying or selling a piece of property. While corporate level versions of this contract can be quite laborious, ones designed for individual home sales from one private citizen to another are usually only a few pages in length. Let's take a look at what one of these agreements looks like so that when you are asked to sign one, you'll know your way around.
Post Tue Aug 13, 2013 9:48 am
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