tag:blogger.com,1999:blog-4402283548766807872.post3058063177455302067..comments2024-03-29T02:47:49.234-04:00Comments on The Blunt Bean Counter: Using a Corporation to Hold Your Investments The Blunt Bean Counterhttp://www.blogger.com/profile/11358868550072516313noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4402283548766807872.post-62240162133946075082017-02-05T09:34:33.968-05:002017-02-05T09:34:33.968-05:00Hi Steven
Yes, if you have excess cash in your co...Hi Steven<br /><br />Yes, if you have excess cash in your corporation you can invest that in a stock trading account under your corporations name. Many clients invest as you suggest in stocks, ETFs etc, some use it to buy real estate, and some to invest in other businesses. The issue you need to consider is if the excess cash becomes large, is their any chance you can be sued. If so you may want to incorporate a holding co. Given your business it appears unlikely you would have a large lawsuit, so you may not need a Holdco, however, you would have to assess the risk of being sued for a large amount of money in your operating co.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-90100078585290804102017-02-03T23:05:15.462-05:002017-02-03T23:05:15.462-05:00Hi great blog.
Im still stuck kn the explaining a...Hi great blog.<br /><br />Im still stuck kn the explaining agian lol.<br /><br />Heres my situation. I recently incorporated my painting company. Its basically just me and i get contract painting jobs to keep it simple.<br />Income each year is between 70-130 but i only need 50k to live basically.<br /><br />I want to do something with this extra money that is just sitting there.<br />I have some experience buy and selling stock on my personal finances (mostly etf and reits) anyways can i just open up a stock trading account under my corporate. Or what do other people do with extra business money?<br /><br />Thanks StevenRusshttps://www.blogger.com/profile/03288652282219559494noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-33883706978505141052016-01-17T08:32:52.452-05:002016-01-17T08:32:52.452-05:00Hi SVS
You should speak to your accountant on whe...Hi SVS<br /><br />You should speak to your accountant on whether this makes sense based on the cost to do so and the various alternatives. Your accountant may tell you to consider undertaking a section 85 rollover, which in English means you will now own your Holdco and your Holdco will own your Opco. However, there are alternative and fancier options including using a family trust, so again, u need to speak to your accountant about what is best for your situationThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-85163884770409354062016-01-16T20:41:06.002-05:002016-01-16T20:41:06.002-05:00Hi Mark,
I have an active opco that has been in o...Hi Mark,<br /><br />I have an active opco that has been in operation for just over 1 year. I set it up with 20000 shares at .01 per share, it is now worth3.35 per share how can I transfere these shares into a new holdco.svs general contractinghttps://www.blogger.com/profile/15525968687790975025noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-57293559048234851172014-07-04T13:55:22.467-04:002014-07-04T13:55:22.467-04:00HI Anon
Holdco is always considered investment co...HI Anon<br /><br />Holdco is always considered investment company and subject to higher corp tax rate. I think you are asking could you be considered a trader. Not typically an issue for Holdco where you have money managed or don't make 20 trades a day.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-56859139421641696692014-07-04T08:24:49.250-04:002014-07-04T08:24:49.250-04:00Thanks very much Mark, that was very helpful.
One...Thanks very much Mark, that was very helpful.<br /><br />One question for you. At what point do you have to be careful about how many assets are securities in the holdco that you would be subject to Investment company status? Ie. if Opco is worth 1mil, fully owned by Holdco, but over time with cash dividend up to Holdco and good investments the securities portfolio exceeds 1mil would that be an issue that you are now more of an investment manager? Or does this only come into play if you have multiple owners of the holdco?<br /><br />Thanks very much for your informational blog!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-39278552933933544442014-05-28T16:20:33.410-04:002014-05-28T16:20:33.410-04:00Hi Steve
The may be income attribution or corpora...Hi Steve<br /><br />The may be income attribution or corporate attribution issues here. I cannot provide a generic answer. I would consult your accountant or get advice prior to undertaking such.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-72091281997227565742014-05-28T11:19:43.373-04:002014-05-28T11:19:43.373-04:00Hi Mark,
Could one use an investment corporation ...Hi Mark,<br /><br />Could one use an investment corporation in conjunction with dividend sprinkling to optimize dividends between spouses? I picture an initial investment and then each year distributing the dividends to the lower net income spouse.Anonymoushttps://www.blogger.com/profile/16795169216993985919noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-62964687848684617772014-05-27T22:44:47.924-04:002014-05-27T22:44:47.924-04:00Hi Eric
This post was purely about whether invest...Hi Eric<br /><br />This post was purely about whether investment income, not active income benefited from being incorporated. I have written multiple times already on the benefit of leaving money in the corp and the salary vs dividend decision, just use the search function if u have not read these posts.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-72972234751792630702014-05-27T20:03:56.613-04:002014-05-27T20:03:56.613-04:00Hello Mark,
This analysis does not take into accou...Hello Mark,<br />This analysis does not take into account that the 1000 left in the corporation was taxed at a smaller rate (small corporation rate) then if it was taken out (and personal tax was paid at a higher bracket). Hence, the initial investment amount will be higher if the money is left in the corporation. Could you please comment.<br /><br />Thank you,<br />EricErichttps://www.blogger.com/profile/11047148130550303202noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-89357431265431591232014-05-27T10:40:37.594-04:002014-05-27T10:40:37.594-04:00Hi Paul:
Yes, this strategy is valid.However, you...Hi Paul:<br /><br />Yes, this strategy is valid.However, you are weighing typically fairly significant accounting costs and way more complexity (including avoiding the double tax issue down the road) against the clawback savings. I have never had a client decide to do this solely for this reason, but I have heard of others doing this.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-78299606952517977082014-05-27T08:46:44.815-04:002014-05-27T08:46:44.815-04:00Hello Mark,
Thanks very much for the ongoing serie...Hello Mark,<br />Thanks very much for the ongoing series of posts. They are very helpful and provide excellent insight into complex areas.<br /><br />I have been told the other reason for having a holdco for investment income is that if you are retired then it reduces your regular income and this potentially avoid various government clawbacks. IE The extra income does not need to be declared personally and thus the clawbacks are avoided. Clearly the holdco still pays tax on the income. Do you agree this strategy is valid?<br /><br />Paul<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-6871909878753814892014-05-26T18:32:21.493-04:002014-05-26T18:32:21.493-04:00Hi Richard:
Foreign dividends are treated essenti...Hi Richard:<br /><br />Foreign dividends are treated essentially like interest, however, you may get a foreign tax credit. However, again, a corp. does not provide any meaningful benefit.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-81580197311384170832014-05-26T11:32:54.459-04:002014-05-26T11:32:54.459-04:00Hi Mark, are foreign dividends treated differently...Hi Mark, are foreign dividends treated differently in this case?Richardnoreply@blogger.com