C-corp vs S-corp tax strategy for appreciated asset - mortgage loan structure question

Thanks for the explanation! I'm not OP but I'm curious - would it make more sense to just set up a C-corp then since they do have the 21% tax rate? And also, are there any legitimate strategies for minimizing taxes on highly appreciated assets besides just paying the capital gains?

Thanks for pointing out those issues. I was definitely confusing S-corps and C-corps. If I went with a C-corp instead, would that solve the corporate tax rate issue? Also, for the mortgage scenario, if I ensured the terms were truly at market rate (documented with comparable loans), would that address the related-party concerns?

A C-corp would have the 21% federal corporate rate, but creates other issues. When you eventually want to get money out of the C-corp, you'll face double taxation - the corporate tax followed by either dividend taxes when distributed to you or capital gains if you sell shares. This often results in a higher total tax burden than just paying capital gains directly. If the terms are truly at market rate with proper documentation, related-party transactions are allowed, but they're still heavily scrutinized. You'd need everything formalized with proper loan documentation, regular payments, appropriate interest, etc. Even then, the IRS might question the business purpose of the whole arrangement.

Did they help with the actual documentation or just gave advice? I've got some appreciated stock and I'm wondering if they could help me set up the right structure too. Does taxr.ai handle complex corporate setups or just personal tax planning?

I'm skeptical about these kinds of services. How exactly did they save you money compared to just talking to a local CPA? And did they catch anything that software like TurboTax wouldn't have flagged?

They actually provided detailed documentation analysis and showed me exactly what forms I'd need to file for the QOZ investment. They don't set up the corporate structures themselves but they reviewed my plans and caught several issues I wouldn't have known about. They definitely caught things TurboTax would have missed. TurboTax is great for standard situations but doesn't give proactive planning advice or catch these kinds of structural issues. They analyzed my past returns too and found a missed deduction related to some consulting income that my previous accountant overlooked.

How does Claimyr actually work? Do they just call the IRS for you? Seems weird that they could get through when nobody else can.

This sounds totally made up. There's no way some service can magically get through to the IRS when millions of people can't. And even if you do reach someone, most IRS phone reps aren't qualified to give advice on complex corporate structuring and tax planning strategies. They're there to answer basic questions, not design tax avoidance schemes.

They use an automated system that navigates the IRS phone tree and holds your place in line. When they finally reach a human, they call you and connect you directly to the agent. It's basically doing the waiting for you. The IRS representatives do vary in knowledge, but I was able to get transferred to a specialist who handles business entities after explaining my situation. You're right that not every phone rep can handle complex questions, but they can often direct you to the right department or send you specific resources. In my case, they mailed me official documentation about 1031 requirements that proved incredibly valuable.

Would this work for crypto? I've got some ETH that's gone up like crazy and I'm trying to figure out how to cash some out without giving half to Uncle Sam.

Yes, it can work for cryptocurrency. The key is that the trust sells it after you've donated it, so the trust itself doesn't pay capital gains tax on the appreciation. You'll need to find a trustee comfortable with handling crypto assets though, as some traditional trustees aren't familiar with the process. Keep in mind that you're ultimately giving a portion to charity - this isn't a strategy to avoid taxes completely while keeping all the money. But the tax benefits plus the income stream can make the math very favorable compared to just selling and paying capital gains tax directly.

I looked into something similar for my business. The Wyoming LLC part can work for privacy and some liability protection, but it doesn't magically change your tax situation. The IRS follows the money regardless of how many entities you put in between. And trying to loan yourself money through your own entities gets really tricky really fast.