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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124982  
Subject: Re: Leaving money in S Cospr at end of year Date: 5/25/2010 8:22 AM
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Thanks for those posts. foo1bar did sort of get at the point that I was thinking of. Namely, one could imagine that if I pre-paid the lawyers this year it would reduce my taxable portion of the revenue this year (and avoid - again in theory - having to loan money to the company next year). I don't think I can really pre-pay (though I will look into it) so I am wondering what the next best thing is. Buy bullion in the name of the company? :)

You're missing the point. If you think you'll have to lend the Corp money next year if you pay the lawyers then, you'll also have to lend the Corp money if you pay now. Put differently, if the money is in the Corp now, it can be there next year. The distribution of profits reported on the K-1 does not represent cash taken out of the Corp.

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