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    Question

    Active income vs. Passive income?

    I wanted to find out if there are any differences in how passive income is taxed vs. how active income is taxed. Is there any benefit to generating one vs. the other? I am establishing a new corporation and based on how much we split the equity between me and my wife - we can determine the % of active vs. passive income. I am trying to structure it so we can get maximum tax benefit - so would appreciate any advice.
    a few seconds ago 1 Answer

    Best Answer

    If the only purpose of the corporation is to reclassify your and your wife's income, it does not matter. You will not be able to reduce your tax bill by this means. The IRS has been able to squash any such attempts with great success.
    a few seconds ago

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