Income is the Most Fragile of All Our Personal Assets!

Income is without a doubt, the most fragile of all our Personal Assets. While it is fairly easy to find employment with enough earnings to supply our needs, proper planning must be implemented to compensate for the unexpected catastrophic event.

If you are in business, proper and profitable management of the entities under your control is only prudent. Revenue and taxation have lasting effects on our lives. These areas can easily be misused or misconstrued.

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One statement needs to be strongly emphasized: “The United States of America, while not perfect, is without a doubt the best place to live and conduct business in the world”.

This country has been and still is the most abundant nation in the world for opportunity and provision enabling one to provide for a family and accumulate assets. Even in light of mismanagement of government and funds, we have an obligation to pay taxes owed.

To some, this is even a privilege, after all, we do benefit from infrastructure as well as protection from some of the tribulations of other areas of the world. It is in this light, these comments are offered.

If we manage several related businesses, opportunity is given to manage the revenue streams and expenses to legally limit the amount of profits to be taxed. This is to be done without falsifying any transaction or cheating in any way. Evasion of tax and the resulting sanction is not a nice or good thing!

One very simple example of this would be a firm, XY Corporation, who from time to time rents or leases equipment from AB Corporation. To XY Corporation, the rental is an expense. To AB Corporation, the rental is revenue. If you have some management influence in both firms, the taxable income can be controlled to some degree.

We will not try to recite numerous instances nor details, but will let your management imagination take it from there. Be sure and check with your accountant and lawyer to set these scenarios up properly and without risk to management and your company!