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"Scenario 2.
End of year, $10,000 left in company, cash. I leave it there somehow.

You just leave it there. You still have to pay taxes on it - so you come up with the $5k for taxes from some other source.

Next year I pay lawyers with it.

Total cost: $10,000.

Plus $5k in taxes, bring the total to $15k, just like scenario 1."

Yes, that gets to the crux of it. If I paid the lawyers $10K this year, I would never see that $5K tax bill, and at the end of the day I would be $5K better off?

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