Taxing a reinvesting business
November 28, 2006 2:42 PM Subscribe
Can I start a LLC (or similar) who's only business is to manage investments and reinvest any gains? What are the tax implications?
posted by blueplasticfish to Law & Government (13 answers total)
If I always reinvest all the gains and dividends of the investments my theoretical net income will always be 0, right?
However, I am sure there is some way I (or the company) would have to pay taxes on this. What would the taxes be, and how can you be taxed if you have no profit? Or, would there be a profit? If so, how is this calculated? Can you be taxed if you reinvest the gains and never take a distribution? What are the different implications for different legal stuctures (LLC, S corps, C corps, etc)?
I will eventually seek legal and CPA tax advice on this matter, but wanted to feel out the Mefi community first.