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Sohodojo Advisory Board Member
Jim Schneider
The Taxman86 Speaks...
09 June 2000
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The Estate Tax Repeal Is Coming with Bipartisan Support; Home-based Business Benefits From Estate Tax Repeal; Why the C Corp?

1. Today is the day and the votes are in.

The Republicans and Democrats are after Estate Tax Reform and here is the summary. However, it will involve a ten [10] year phase in, and not much until 2006. The Unified Credit will be replaced with exclusion for transfers after 12/31/00.

2. Home-based Business is a "Small Business" for Estate Taxes.

A local real estate guru tells us that $1M homes are now very common in San Diego County as is the case in other parts of the Country [the taxman has a winner here with the repeal of the IRC Section 1034 Residential Roll Over]. If that $1M+ home is a home- based business then it probably qualifies for the "Small Business" exemptions under existing Estate Tax rules. Do you see any discussion of these income and estate tax issues in this article? Maybe the author does not pay any tax?

3. C Corp. vs. S Corp. vs Sole Proprietorship?

Is the C Corp. really the way to go or are the leading experts still correct when they promote the S Corp.? Pension Plans for S Corps. do not allow for participant loans, and if someone has retired with an IRA Rollover, forming the C Corp. and a corporate retirement plan [the IRA Rollover can be moved into the corporate plan] may give you the startup capital you are looking for. Fringe benefits are better with a C Corp. Best of all is the IRC Sections 1045 and 1202 benefits for Qualified Small Business Stock [this requires a C Corp.].

By the way do you like to commute or is that home-based business the way to go? Check out these horror stories which are more real than we want to know.

Jim Schneider, LL.M.

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