This note continues Tax Principal Raffaele Ruberto’s ten-week Friday Tax Tip series, helping business owners and their family members mitigate the new Tax on Split Income (“TOSI”) and upcoming Tax on Passive Income (“TOPI”) rules.
As always, if there are any topics you would like addressed, or have specific questions you need to be answered, send an email to firstname.lastname@example.org
Tax on Split Income (TOSI) | Tip 2
From 2018 onward, it is still possible to pay certain types of dividends to a family trust, and distribute it to the beneficiaries or retain it in the trust for investment purposes. The funds retained in the trust can be invested. Income from the investment generated from the trust can be distributed to specific beneficiaries who will not be subject to Tax on Split Income (TOSI).
To learn more, or discuss any of our signature TOSI Solutions, please contact SB Partners.
Tax on Passive Income (TOPI)| Tip 2
Now is a great time to look at the types of expenses you are incurring to earn investment income. These deductions will reduce the amount of passive income that will be caught by the new Tax on Passive Income (TOPI) rules.
This strategy allows you to preserve the corporation’s small business deduction.
Please contact SB Partners to learn more, or discuss any of our signature TOPI Solutions.