284. The Triple Tax Benefits of Paying Your Children
Tax Smart Real Estate Investors Podcast
Benefits of Transferring Business Ownership To Children
Transferring business ownership to children offers multiple financial benefits. First, businesses owned by parents, particularly LLCs, can maximize tax deductions, as payments made to children can be classified as business expenses. This reduces the overall taxable income for parents. Second, income transferred to children can be received tax-free, especially if the child is under 18 and earns less than the standard deduction, allowing families in higher tax brackets, like 32%, to appreciate significant tax savings. This strategy not only decreases the family's tax burden but also fosters generational wealth, as the financial benefits remain within the household, setting the stage for sustainable wealth accumulation across generations.
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