Looking for tax reduction strategies

[Juliet Hawthorn]

Scenario: I buy 3 properties in an LLC and the properties are rented with a net income of $30,000 a year.

I leave that money sitting in a bank in the name of the LLC. Each year I use the entire rental proceeds to reinvest into another property under the LLC, without paying myself anything. As I am continuing to reinvest in the business, would I still need to pay income tax on the $30,000?

[Wayne Brooks]

Yes. You and the llc are the same, for tax purposes. Income is income...it doesn't matter if you don’t “take it out or spend it”.