With the inception of the Affordable Care Act in 2013 came a 3.8% tax on shareholders considered passive investors in S corporations. The tax is burdensome. And as a business becomes more successful, the tax can easily surpass six figures. For the passive investor, it can feel like punishment, causing stress between family members and even the business.
The most common solution is encouraging passive investors to become active investors. Many consider this approach unfair. Should a passive investor be forced to give up their desired career because of this tax?
Luckily for family businesses, there are other options to consider.
Read “Fair vs. Equal” and discover four alternative options for passive investors affected by the Net Investment Income Tax.
Read about the four alternative options for passive investors affected by the net investment income tax here.
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