Hi there. Question Should I take $150,000 that is just sitting in my business ssavings account and incorporate another small business with the purpose to buy an investment property?
Follow these steps:
1. Incorporate a company to purchase real estate (e.g. Real Estate Inc.)
2. Make a tax-free loan (e.g. $150,000) from your existing operating corporation to Real Estate Inc.
3. Charge 1% interest on the loan to be paid by December 31 of each year
4. Real Estate Inc. will use the loan proceeds + a bank mortgage to purchase the property
5. Real Estate Inc. will collect rents, pay for the mortgage, and relevant property expenses