I am wondering what the group thinks of a two-entity stucture like this:

Limited Partnership - LP interests owned by individual [Self/Family], and potentially a small portion owned by the C-Corp, if it makes sense to do so. The GP (General Partner) for this partnership is the Management Company (a C-Corp discussed below). For the management of the investment, the LP contracts with the GP for a market-based management fee. All assets are owned at the LP level, allowing income to flow tax to the entities who own an LP interest and are taxed only once at the owner level. Any risk (beyond loss of investment) is soley born by the GP (the C-Corp) and not LP owners.

[I have purposefully limited the LPs in my example to one, but in practice, I see this being several based on the various partnership you may choose to form]

C-Corp - Management Company - Stock owned by individual [self/family/ira]. Revenue generated primarily by fee income from management agreements with LPs. Generally, this would be service based and would eat most of the business costs you generate. This company would receive the compensation for any work that may be done unrelated to the LPs or W2 earnings. It will have at least one employee and would seek to manage its affairs try to have taxable income of approximately $50K/yr to fill the lowest tax bracket for a C-Corp at 15%. Additional funds would be payrolled out, likely into deferred comp arrangements like a profit sharing plan.

C-Corp wouldn't dividend unless it had retained earnings >$250K (where it would get taxed to retain its earnings)... so at some point you may find yourself managing to break-even, or alas... paying some dividends. I beleive you could even structure the C-Corporation in a manner that it could be owned by your IRA making a dividend less troublesome.

Just wondering about your thoughts. Am I missing anything?