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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Purely from a business perspective I don't understand why he is distributing income from his business and then, as he claims, making additional capital contributions to fund the business. It seems like it would make more sense to just keep the income with the business as retained earnings but maybe there is some tax angle here. [/quote] It is probably a pass through entity so the non-salary profit amounts pass through as distributions regardless of whether they are actually distributed out of the business and into the individual's bank account. In short, yes, those monies may have been reflected as distributions on his individual tax return but in fact retained by the business.[/quote] Yes and the couple is paying taxes on those distributions he is not taking home — yet. [/quote]
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