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My husband and I own a small business - we employ six fulltime and one part time. We have been studing the Fool site as we will be debt free in a few months and would like to invest Foolishly. We were wondering if 1) A small business can purchase stock and 2) if so, is there a tax advantage as opposed to purchasing as an individual investor?

Thanks for any input.

Judy
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Judy,

I am guessing that your business is a sole proprietorship - IRS Schedule C. If thats the case there is no difference in buying stock as a small business. You will own the stock as an individual.

If you have a small corporation it is better to own stock outside the business for many reasons. Corps have no capital loss deductions, no long-term gains tax rates. Its a good idea to keep investments away from business creditors.

good luck,

EG
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EG,

Thanks for your reply. We are a small corporation and your points are well taken. We have done many things to avoid creditors such as we own the building and lease it back to the business. I also do not have fiduciary (spelling?) responsibility to protect our personal assets. While we do not mind paying taxes, there is never a reason to pay unnecessary taxes and we wanted to make sure we were not missing something as we begin our investment planning.

Judy
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