What is the best state to set up a C corp for trading? Tax free income and corporate tax,...

Discussion in 'Taxes and Accounting' started by invortex, Apr 28, 2018.

  1. Robert Morse

    Robert Morse Sponsor

    Westchester.
     
    #11     Apr 30, 2018
  2. Sig

    Sig

    Just to clarify, you get the tax benefit from moving, not from setting up a C-corp, and you have to live in the state to get the tax free benefit, not just have a C-corp there. You'll generally get no benefit from setting up a C-corp and you will face double taxation so there's generally a loss there. You may be thinking you can set up a C-corp in a state you plan to move to eventually and dividend yourself back the profits then to avoid state tax. If so keep in mind that if you live in a different state than your company is incorporated in you'll have to register as a foreign Corp in the state you live in. The Corp will then have to pay most if not all of your home state's corporate income tax under a 3 factor test.
     
    #12     Apr 30, 2018
  3. invortex

    invortex

    Thanks. I was thinking of relocating.
     
    #13     May 4, 2018
  4. Sig

    Sig

    Well that solves that problem then!
     
    #14     May 4, 2018
  5. invortex

    invortex

    I realized it was too complicated to just set up the C corp in a no corporate tax state. I realize that the C corp will be giving me dividends and salary and I would then have to pay local income tax on it!
     
    #15     May 4, 2018
  6. boomdog

    boomdog

    Check out Wyoming's (Unrestricted) Trust. You might be glad you did. /:')
     
    #16     May 5, 2018
  7. invortex

    invortex

    Thanks. I did. I can only take out 5% out each year.
     
    #17     May 6, 2018