Active and Passive Same company 50K

Question

2282 viewsFebruary 12, 2019Accounting

0

Tim (anonymous) Posted February 8, 2019

I have active and passive income in same company “O” and will soon surpass the 50K new limit. If I start a separate company “H” for future passive investments will the new companies passive income still cause my “O” company to lose some small business tax rate (cause I own both ) or because they are separate they wont effect each other ?

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1 Answer

score 1 · Answer 1 · 2019-02-12T19:16:29+00:00

Since the 2 companies are associated (they are both owned by you), they will affect each other. If the total passive income of all commonly controlled companies is more than $50,000, the small business deduction limit will be reduced for your active business.

Active and Passive Same company 50K

1 Answer

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