Sarah incorporates her small business but does not transfer the machinery and equipment used by the business

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Sarah incorporates her small business but does not transfer the machinery and equipment used by the business to the corporation. Instead, the machinery and equipment are leased to the corporation for an annual rent. What tax reasons might Sarah have for not transferring the machinery and equipment to the corporation when the business was incorporated? Suppose Sarah tells you that some of her friends lease equipment to their corporations. Why might that be a poor tax planning idea in 2018?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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South-Western Federal Taxation 2019 Essentials Of Taxation Individuals And Business Entities

ISBN: 9781337702966

22nd Edition

Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney

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