How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4193
Experience:  Providing Financial, Tax & Business advice since 1986
1929974
Type Your Finance Question Here...
Lane is online now
A new question is answered every 9 seconds

If Business 1 located in State A conducts work in State A and

Resolved Question:

If Business 1 located in State A conducts work in State A and State A has more taxes than State B. But Business B is located in State B and does "marketing" which takes almost all of Business A profit. Both business owned by same person. is this illegal?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Lane :

Sure, you just described a fairly typical situation... at least not Atypical Now, how you handle the taxes is a different story ... are both of the companies Pass-through entities whose income and/or losses flow through to the owners tax return? (sole proprietorship, s_corp, LLC or partnership)

Lane :

I still don't see you coming into the chat so I'll try to answer generally:

Customer:

sorry, phone call

Lane :

If both entities are owned by you, and they are passthroughs (mentioned above) then when you do the informational 1120-s for the S-Corp or the informational 1065 for the partnership OR the schedule C for a single member LLC or Sole Pr, then everything flows to your personal tax return anyway

Lane :

sOK I'm here

Customer:

Well State A charges corp taxes, State B doesnt,

Lane :

Ahhh

Customer:

So there still is a saving of 9%. but is there a better way..

Lane :

then that will paid on the state corp return of state A

Lane :

Please don't shoot the messenger here, state corp taxes are paid on a state corp return forr that business

Customer:

If Business A ends up making a profit of 5k. than the 5k pays 8.8% taxes for Corp and than the remainder goes to the personal side....

Customer:

yes, but in NY, theres a state and city corp tax

Customer:

sorry for the mix up. so business A would be saving on the city

Customer:

So since Business B would be the byusiness with the income, is it better for it to be a pass through

Lane :

ok, right, but again when you are talking about state and/or city taxes they are taxed to the entity, specifically

Customer:

Yes, so lowering the profit of Business A that pays a 9% city tax by paying Business B in a diff state. would be a savings.

Lane :

you bet

Customer:

and legal.

Lane :

CA keeps people from doing that by requiring a minimum tax

Lane :

yes

Lane :

completely, profit is profit

Customer:

perfect. now its about finding which state has the lowest state tax on the personal side.

Customer:

thanks for your help

Lane :

sounds like you have your arms around it

Lane :

You're welcome

Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4193
Experience: Providing Financial, Tax & Business advice since 1986
Lane and 4 other Finance Specialists are ready to help you
Expert:  Lane replied 1 year ago.


Thanks for the rating Guy.

Let me know if I can help again,

Lane

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney