From: floydb@sun01.admin.rpi.edu (Barry B Floyd)
Subject: Re: fat cat investors???
Distribution: usa
Date: Thu, 23 Jul 1992 15:07:55 GMT

frazier@maxwell (Greg Frazier) writes:

>dfavor@logantivoli.com (David Favor) writes:
>: > As food for thought, here's an example of how tax code already favors
>: > the investor:  [can't write off eng. calculator, can write off
>: > "business" trip to Bahamas]
>: 
>: you can spend your time disagreeing with the tax code... in which case you
>: will get nowhere... or you can become flexible enough that whenever the tax
>: code changes you restructure your financial plan where needed. for example...
>: 
>: the $25,000-per-year should have some form of small business that allows him/her
>: to write off that $100 scientific calculator.
>: 
>: the $25,000-per-year engineer should also have some form of small business
>: that allows fat-cat-traveling anywhere in the world to be tax deductible.

>I disagree with both halves of David's response.  First, I think
>disagreeing with the tax codes does a lot of good, and I am hoping
>that we will see major changes to it in the next 8 or 12 yrs.
>Second, deducting expenses for "small business" is only legal if your
>business turns a profit [at least one year out of three?].  Finally,
>there is the question of whether your tax savings will offset your
>cost of belonging to the Given's Organization (or whoever it is you
>pay to help you navigate the tax codes), which is not cheap.  It
>certainly would not pay for itself in our personal situation, but
>then, my wife and I are still students.

>--


>Greg Frazier	frazier@CS.UCLA.EDU	!{ucbvax,rutgers}!ucla-cs!frazier

I in turn disagree with Greg's implied bias and factual content. 

I have found that some people feel as comfortable incorporating as others
do about open a checking account, whiles others are unsure about either.
You do NOT have to buy into the 'Givens' type programs in order to
become more creative about financing. You do have to spend some time
learning about tax codes.

I have gotten a lot of free info from the US Gov't, my public library,
etc. and cheap info from local book stores (used and new books). A simple
tax guide available in most book stores can get you started ($15.00).

Factually, IF Greg is correct about "profit" then all too many companies
(GM, Ford, UAL, etc.) wouldn't be able to take advantage of write-offs.
This of course is not the case. Not only have 'companies' not been profitable
for years, some companies have been legally bankrupt for years (Chapter
11) such as Ames, LTV, etc. and still seem to be writing off expenses.
 
Whether or not an individual can legally take advantage of corporate
status is measure by the 'arms length' test. Extreme examples abound
from obviously legal to obviously illegal, only you can judge your
own situation (with professional help if you wish). Acting in good faith
and keeping copious records is your best defense even if you suspect
you are treading on thin legal ice.
 
my 2 cents...
 
barry
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