What is a Holding Company?
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- Опубликовано: 28 май 2024
- #holdingcompany #businessstructure #taxes #liability
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People are mistaken thinking a holding company would save on taxes. The general purpose of a holding company would be to hold assets. This doesnt just include subsidiaries, but also things like trademarks, patents, IP, cash, stocks/investments, etc. People would also have to understand the taxable implications of a holding company, especially if the IRS classifies it as a personal holding company. They should also understand that most holding companies are usually formed as an corporation so it doesnt really help with personal tax savings like it would with an LLC where losses could help offset taxable income, but there are many ongoing requirements and would still require the holding company to be filed in the state of the owner if the incorporation was done in another state like Wyoming or Delaware and the owner is materially participating in the management of the holding company. If not and the owner remain passive completely, the company technically wont have to file there but the owner would still have to pay taxes it would receive if the HC regardless of where it is formed. People should really talk to an CPA and an attorney before trying to jump into the boat thinking it would save taxes lol. Its just asking for trouble. You can do research online or from youtube but unless you know and understand the federal (and each state) tax code inside and out as well as the statutes around business structures, rather if its a corp, llc, lp, [statutory] business trust, etc., people should talk to an attorney who would be knowledgeable on this matter and could give the best answers.
All of that.
@@HomeBizTaxLady Any advice is welcome. I am one of those interested in the idea of a holding company for the purpose of creating multiple businesses and setting up those businesses as child entities of my holding company. The purpose of the holding company would be to add an extra layer of asset protection but to also provide capital support to my child companies by leveraging the available capital of all my child companies. For the topic of tax savings if my child companies are LLCs and my parent company is an S-Corp then wouldn't the child company's net income pass through to the parent company. With the parent company being set as an S-Corp and paying myself salary I would be protecting the nonsalary portion of the holding company's income from a FICA tax as it would only be subject to a Federal tax as well as gain the benefit of further reducing that nonsalary portions tax exposure by applying a qualified business income deduction? Wouldn't this be a better option than owning all the LLCs separately and paying out taxes on each at the self-employment tax rate on the full net incomes? Obviously, there would be some very well-planned and thought-out articles on organization, but is this doable or an uneducated pipe dream? Obviously, I would need a CPA because of the complexity but I want to understand this so I can speak with my future CPA in a way that they will fully understand my intent and meaning. Any information, advice, or wisdom is welcome. Thank you.
@@kevenbates4313 correct. notice this question was never answered and the topic of self employment tax wasn't mentioned🤔
This video may be the single best video on the internet. I lovethe honesty and the practicality. Real advice for real people. Very well done.
Warren Buffet definitely started with a Holding Company. Scared money doesn’t make any money. Buffet’s dad was a rich politician also, I’m sure that helped a lot.
Holding Company owns Operating Companies...I will form a HC first and send my working capital to the HC. That HC will start the OC not me... I’m a ghost!
Yeah I don't think this video gives unbiased info its clear that she's not on board with the concept of an HC. I've never heard of an HC being a way to save taxes I've only known it to hold assets. And she keeps calling it "sophisticated" and overhyping it basically talking down to us. She's probably not a fan of the Savage Finance guy on RUclips, probably the motivation behind making this video.lol trash
Wrong! Warren's father was upper middle class and didn't give Warren money. Warren started with a paper route and then bought pinball machines and put them in barber shops. Berkshire Hathaway came years later. He even owned a gas station and a farm well before buying shares of Berkshire. And Berkshire Hathaway wasn't even his business. He bought shares slowly over time until he became majority owner.
Scared Money Keep Money homey.
@@iamOAKland genius!
@@f12pushthekeys Warren’s father was upper middle class? That’s one of the dumbest sentences I’ve read on RUclips. What’s upper middle class? How much money is that a year? Warren Buffet’s father was a four term Republican United States Representative. I don’t know of any politicians that aren’t rich. Read a book about history homie.
I am glad i found this video before i pulled the trigger on the holding company.
Glad it helped!
Thank you for this video. I started my holding company about four or five years ago not really knowing the details. I did however already know about liability protection. Taxes are up to the individual companies. You hit on all the points of why I started mine, mostly thinking big picture for my business endeavors. Thanks again and great video
I'm trying to start a company that can help people be protected and empowered in so many different ways. I'm glad I found this video. If you're reading this, I wish you plenty of success. Thanks for making things make sense, Sister Queen!
Anyone else starting a business in 2021?
best advise I found on youtube. I like your style girl. Right to the point and no fuss around. I always appreciate the blunt truth much more than a sugar-coated deceiving lie. I like you. Keep it up!
So much clarity thank you!
Thanks for giving it to us straight! This has been on my mind all day.
I get it. Without the underpinnings to hold it all together the Bizzie Bizzz won’t work!! Thank you for helping me understand.
Thank you very descriptive!
This was extremely helpful and informative. Thank you so much!
Thank You!!! You helped me and others. Some guys throw content to the audience and ghost them without an explanation. Thank you for your knowledge, simplicity in explanation and being a human who truly help others. God bless!
Thank you for this content. Definitely something to think about.
Nice content. Great service to business owners. Thank you for sharing.
Thank you for the clarity every other video is nonsense glad I found this on google. Very informative and helpful
Great info! Thanks for the video!
First-time viewer and subscriber of your channel! Thanks for the video! I've found my business lawyer with you! 🙂
Thank you so much for the information about pumping the brakes before you jump into something keep up the good work
Wow this helped me so much thank you I just subscribed to your channel 🙏🏾🙏🏾
Doing research on a large multinational company in the field I'm entering and curious about holding companies. Got it! Thanka!
Thank you... incredible clarity for the first time ever. Could you please explain the importance of a holding company to protect intellectual property?
Very Informative
Straight, no chaser...THANK YOU.
I’m new to your channel. Thank you so much for this information.
Welcome!
Nothing wrong with a holding company. Filing options determines your business strategies.
Thank you very much for explaining about holding company.
Excellent. Thx
YOU ARE AWESOME. I APPRECIATE THE INFORMATION.
Thanks for the wisdom
Real shit, I had to get my first CPA last yeah and this year I have an additional two LLC so definitely have Cash money 🤑
Very informative. Thank you. I am now convinced I do not need to go through the headache forming a holding company till wayyyyyyy down the road. Thoroughly enjoyed the extreme honesty. Will be subscribing. Keep up the great work!
Good advice clearly put !👍🏼
Great advice! New sub!
Thank you.
thank you so much.
Am learning a lot from your content keep it up 👍
Thank you so much
Thank You So Much
You're most welcome
I like this due to my interest in owning / investing in other companies.
Thank you
thank you very much
I think you should relabel this video to “Warning about creating a small business holding company”. I understand how they work with a focus on protection. But, being that you’re the Home Business Tax Lady, I was expecting some tax information on holding companies. Do you have a video speaking to holding company tax benefits?
This helps a lot... thank you Queen!
Great advice ❤
Sound advice.
Consulting in addition to studying law
cheers
Thanks a lot for the awesome content. One quick question. I saw someone use one Wyoming LLC elected as S corp for the holding company, then it has 2 operating companies (1 generates ordinary income, 1 is trading company that generates passive income ). By shifting the profit from ordinary income -> holding company -> trading company, we can defer the tax and 1 year later, the long term gain can be passed back to the owner of the holding company. Does that make sense or it is a scam? Thanks a ton. :)
Alright, I stop crying now hehe.. thanks for making such informative video.
Do your recommend having a holding company when flipping house? And if using an LLC as a holding company, which election should be used?
I needed this. So you can open a Holding Company later on?
great advice...spoken like a professional that actually cares to lead ppl in a sensible direction. Do you have a video on compliance cost? or compliance checklist? You've earned my subscription.
How are holding companies different from a trust?
Would like to do a consultation with you and inquire about your services please.
If your liable for all in a lawsuit you might as well have separate LLC 's in my opinion.
With so many dynamics too each entity, how does one determine the right entity or holding company before a final decision is made ?
So what's the process to having your holding company own your other companies
This did help a bit, however tax savings wasn't my concern. The best method of organizing my businesses was the aim.
I tried to schedule a call with you but calendly was not working
“Knock thy self out” 😂😂 I LOVE IT!!
Caught that too
Ur so pretty and smart, great video thank you🌹
Love this! #Relatable is so many ways! they set-up something super complicated via legal zoom and expect a CPA to charge $50/return. haha
Hello friends,
I have 1 question: For holding companies or companies investing in other companies, where will their revenue come from ?. Thanks.
Can I create a Holding company before my subsidiary company ?
I would not think there are many small business entrepreneurs in need of holding companies. In larger businesses, the principal use is to ensure there is a common parent corporation to allow for the filing of a consolidated tax return where the business entities being held are also C corporations, and to raise capital.
It really depends on the nature of their business but I can tell you that the average entrepreneur dont need a holding company. That being said, there are some who do have multiple ventures and would like them all to be own by one entity, in which like you said, you can then do a consolidated tax return, though that only applies towards corporations, not LLC, LP, Trust, etc. The holding company would only need to hold the majority shares and have the subsidiary fill out and submit an Form 1122 to the IRS. While it may be simple from the outside, it can get complex and must comply with the consolidation return regulations otherwise there can be fines. I dont often hear much about small or new holding companies raising capital for its subsidiaries, but for holding companies that partake in real estate or is registered as an REIC/REIT (Real Estate Investment Company or Real Estate Investment Trust), that would make sense since they would be holding real estate and properties, rather if its in a subsidiary or directly by the entity and have income coming in from such investments, but this is a whole different story though.
EDIT: Just to quickly add, consolidated tax return doesnt work with every state. Its mainly for federal tax return. States may have their own stance on it
randombytes yes, right....the ownership threshold is 80%...and right, some states accept consolidated or combined filings, but not all do. The consolidated return regs are quite complex.
@@randombytes But now you're talking about a holding company as not only and asset protection but also a tax saving device. Which is where the conversation gets interesting.
A for content
C for delivery
Should I open a checking account for each subsidiary?
Yes, keep the books separate.
✅
Can a holding company be sued by child support? Or get from your holding company?
Ha ha you wished baby. That's only part of it that deviates from the reason the people have a damn good idea that they also are banks = utility company's and stores whom borrow from our real assets boom
Is a holding company the same as a shell company?
Great question! No, not the same thing. A Holding company owns other businesses, and is actively involved in business. A shell company is not active in business, and may be a place to hold funds or provide a layer of anonymity. Shell corporations generally own no assets. Although shell corporations are legal entities, they are often used in money laundering schemes.
Can I turn an existing LLC into a holding company? If I can, how will I do that?
ED
JUST GO TO
WWW.INCORPORATE.COM
U DISSOLVE LLC AT COST
AND START HOLDING COMPANY
AT COST COMES DOWN TO COST FEES AND BEING IN GOOD STANDING
WITH THAT STATE...jb.shalom
Your existing LLC can function as a holding company because a holding company can be a simple LLC. I think you are thinking of form an S-Corp which is just a different method of taxation as opposed to a method of company organization. A simple LLC can file to be taxed as an S-Corp with the IRS, and it doesn't change a single thing about the structure or organization of a simple LLC, even if u are the only member of ur simple LLC. S-CORP taxation is typically only worth it if your company is reasonably profitable because you will be paying yourself a reasonable salary so typically 70,000 plus profit a year. If you are short of that than an S-Corp is not worth it. But an LLC can function as a holding company no change needed.
Thank you!
Disclaimer this video has nothing to do with information on holding companies
Cfmr
How many subsidiaries can a holding company have?
How many does WARREN BUDGET
Have Berkshire Hathaway have that's
How many and more bj
yeah, no.
You repeated the same sentence for 10 minutes.
"you know"...
"you know"...
"you know"...
"you know"...
no ! i dont know ! if i knew i wouldn't be here !
You're beautiful and innocent looking. Just subscribed. 🌷🌷🌷
You need to learn little bit more before you talk to people on a RUclips
thanks for this info