Capital Gain Tax - Individual vs Corporation?

Question

In California, with the same amount of money on investment, is the tax rate favorable to an individual or to a corporation?

I'm concerning about the capital gain tax amount that I have to pay at the end of the year. If I have 30K USD, should I invest it under my name individually, or should I invest through my company (C-corp.) as a capital? Which way can I save more from capital gain tax? Thanks…

Answer 1

That's easy.  If your C-corp gets the capital gain, you get to be taxed twice - once as C-corp profits and once when the C-corp makes the distribution to you.  If you invest it as an individual, you only pay tax once, and the capital gains rates are always at least as good for an individual.

I have to ask the same question as the other answerer - why do  you have a C-corp?  If you are the sole owner and it only has only one class of stock, you probably qualify to convert it to an S-corp so you only get taxed once on the corp's profits.

Answer 2

You need to talk with your CPA or EA who understands your total financial picture. Why do you have a c-corp?You may also want to see if a c-corp is in your best interest.