Forum Moderators: LifeinAsia
Question: Is there a way to legally buy an office in the US (which may also be used as a second home) out of company(Inc. but 100% owned) based profits?
I understand that the premises would be considered an asset of the company, but can anyone explain the true downside elements and any methods of avoiding them?
..... Shane
I have asked my accountant this question....but I didn't like the answer.
That's not to say it wasn't the right answer of course.
Personally, I have always kept personal and business assets seperate. It's dangerous doing anything else. Having your house as an asset of a company means if the company goes belly up, you lose your home. And as much as you can say now that you have a good solid business and company, who knows what's going to happen over the years?
I'm not sure how property law works in the US, but in the UK this could also give rise to a major capital gains tax liability (if the property market goes up) - I suspect there is something similar in the US.
I would either listen to your accountant or, if for some reason you think he's given bad advice, get a second opinion from a different accountant.
But seems to me (as a non-US resident and non-accountant, but speaking generally) that there are two considerations. First, having your home owned by another entity (even if you are the sole shareholder) and secondly, tax.
TJ
Also out of curiosity, why Vets
I would think because they very often have their surgeries at home. Same with some doctors, physicians etc.... they probably know all the ins and outs.
My guess is most of them probably own their home in their personal capactiy and their surgery is a business rather than a company. I suspect they get an element of tax relief on their property outgoings which they can put through the company books. In the UK I think this is about 10% (of rates, bills, mortgage payments, property maintenance etc).
