How Captive Insurance works and how it can really help your business

How Captive Insurance works and how it can really help your business

http://ift.tt/2CWKqBB Tax Reform did not undo the benefits of Captive Insurance companies. Learn how this great tax shelter also gives great asset protection too. Many promoters learned that business owners are incredibly agitated about litigation and will offer what they claim are lock solid asset protection plans that MUST BE OBTAINED OR ELSE. Solicitations I’ve seen are: offshore trusts complicated US holdings structure including Wyoming and Nevada corporations over-compartmentalization of assets that leads to inefficient allocation. The problem with many of these plans is that they can create more risk than they solve. First, tax compliance and accounting cost go way up. And worse, if an offshore entity is involved the tax compliance costs are even higher. Yet ever worse, the penalties for getting even technical things wrong are met with a fury unmatched by any domestic tax issues. What the sense of creating an asset protection plan that could potentially protect you from a business or person, but puts you directly in harms way of a much much more powerful organization. The IRS? The second issue is that these complicated asset protection plans have real formalities that must be followed or a court could completely ignore the structure. This is called piercing the corporate veil. If you have a trust or structure but treat all the income assets as you piggy bank, and fail to follow corporate requirements like having meetings, all your complicated work can be completely undone. A bad asset protection plan, and which there are plenty of, can create more harm than good. It can offer no true protection yet wildly increases compliance costs and compliance risks. That's why before jumping in and engagin in something incredibly complicated, a business owner should really look closely at Captive Insurance first. It offer assets protection and allows all premiums as a deduction to the operating company, but is NOT income to the Captive Insurance Company. This is a one-sided equation that can really help you reach your goals and stay there! Contact us info@irsmedic.com to discuss of a Captive Insurance should be part of your overall strategy. Parent & Parent LLP 144 S Main Street Wallingford CT 06492 (203) 269-6699 https://youtu.be/2wcZ2Rrs3-c IRS Medic