Originally Posted By: wntrrn

AP, do some research on how income is figured for an S Corporation. Cosnider that at 250K that person will already be paying 60k or so in federal taxes. Then consider the person took a loan to purchase that business and pays another 60k per year toward that loan. 250k shrinks pretty quick. The 60k paid toward the loan is a shareholder distribution so is taken out of the 250k net, not the gross income.


WNTRRN, you need to take your own advice here. The "loan to purchase the biz" indeed might have payments of $60K, but unless you structure your purchase of the business foolishly, that will be accounted as a business expense, and will NOT be taxed as income tax at the owners marginal rate. Nor should the loan payment be a shareholder distribution. All this stuff you're saying is unsound business advice.
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