Passive Vs. Active Income
Looking for some tax advice. Question: We have an S-Corp that owns income property. We have income generated from another source that we would like to stream through the S-Corp. Do we have to keep the passive income seperate from the active, and if so, how do we do this from a tax stand point?
Thanks for your advice.
The way I understand it... the passive income cannot exceed a certain %age of your s corps total earnings..... and for the life of me I cant remember that %age....
If it's exceeded you lose the s corp status... your cpa should have the answer off the top of his head...
I have a phone call scheduled with mine for monday...I can ask and get back to you..if you like...
I'd love to hear that too.
Ronnie
[addsig]
Dave,
Thanks for the reply. Yes, please let us know what your CPA says.
Perhaps this article will shed some light on your question. While the article is geared to C-Corp and Personal Holding Company issues, any closely held corp (such as an S-Corp) may be also be subject to this pitfall.
http://www.nysscpa.org/cpajournal/old/14469571.htm