What is the name of your state (only U.S. law)? Washington state
Through a WA state LLC S-corporation in which I am a 50% shareholder (my wife is the other 50% since WA is community property), I have earned substantial income from consulting work over the course of the year (2010). This income has been saved up to a substantial amount in a business account belonging to the LLC. I don't actually need this money for personal use and would like to re-invest it rather than have it distributed to me as salary and incur income and SE tax liability on that.
Is it possible to have the LLC use that money to buy income-producing real estate property in its name or invest that money through a stock account, also in its name? Would that avoid the salary distribution requirement and thus avoid the income and self-employment taxes?
Basically, if the money earned by a S-corp is used by the S-corp to purchase income-producing assets to the extent that there is no money left to pay salaries, let alone distributions, would the income and SE tax liabilities become zero?What is the name of your state (only U.S. law)?