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Yes, where does it go? ALL undistributed income is retained in the business, as, wait for it. . . Retained Earnings. This is the same for all types of business entities. It may be called something different (capital), but it's the same thing.
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One big difference is members of the partnership pay taxes on their pro rata interest and you can distribute it or not based on your desires.
Yes, this is a difference in how partnerships are taxed versus a C corp., but it is irrelevant in a discussion about retained earnings.
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There is an individual capital account that must be balanced for each owner and no where in that paperwork is the word "retained earnings" used on either the 1065 or the schedule K. In fact the IRS uses the terms under section M2 on the 1065 "capital accounts" and on the 1120 "retained earnings"
Capital accounts and retained earnings accounts are the same thing, but for different types of businesses. In all cases, they represent undistributed earnings.
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If taxed as a corporation, retained earnings does not generate a tax bill for the share holder.
Nor does it for a partnership.
Earnings that aren't distributed to owners are retained in the business. A corporation calls it retained earnings. A partnership calls it capital accounts. But it's the same thing.
If a partnership holds 50k in net income and doesn't pay it to the partners, the partners are still taxed for that amount that year. You are incorrect at the end of your post just above this one. As Trump would say, bigly. C corps can withhold that 50k for ever and the share holders are never taxed until distributed. Then when distributed the taxes are treated at a different rate.
I'm not wasting my time with you any longer the two types of entities aren't even close to the same thing and retained earnings in a c corp is very different to a partnership's capital accounts and is taxed entirely differently.
They are very different things, they have entirely different tax treatments and you are full of **** for trying to say they are the same because "lol both companies can keep money in the account that wasn't paid to owners so it's retained earnings herp derp!"
They aren't the same thing. They have very different tax implications. End of story.
Write your Senators and Congressperson if you think this is a change for the worse!
Would like to hear from professionals...do you think this proposed change is going to hurt business? Hurt prices? And if your local or national Realtor groups/trade associations are fighting against this?
I'm honestly surprised to hear more Realtors aren't up in arms about this. My wife asked our agent and she was clueless, and said no one in her office has mentioned anything about it.
I've been checking around the web to see what others are saying, and from what I'm seeing, the professional RE world seems by in large to be asleep on this one.
Either they're mostly still clueless, or perhaps in denial or both. Either one is perfectly understandable, imo.
I'm honestly surprised to hear more Realtors aren't up in arms about this. My wife asked our agent and she was clueless, and said no one in her office has mentioned anything about it.
I've been checking around the web to see what others are saying, and from what I'm seeing, the professional RE world seems by in large to be asleep on this one.
Either they're mostly still clueless, or perhaps in denial or both. Either one is perfectly understandable, imo.
In my area I think most realtors are conservatives--and likely believe Fox News is the new version of the burning bush communication Moses had with God...
So just like they voted for my two GOP Senators and Trump
They will miss the boat with tax plan...but they will blame Obama--just like the post right after yours...
Talk about dog whistles. Sorry, but the facts actually demonstrate the opposite. Data from 2014:
-The top 1 percent of taxpayers in 2014 paid 39.5 percent of the total individual income tax collected. Think about that for a moment.
-In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent. Let that sink in.
-The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
-The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).
What you wrote is typical liberal propaganda (especially the oft-quoted line "The rich need to pay their fair share"---like fingernails on a chalkboard) but I prefer the truth to propaganda. Now, if you are one of those who have bought into the idea that "they can afford it" more than the middle class can, I suppose that is true but how is that fair? As I've said, for the rich to pay their "fair share", they would need a huge tax cut and we in the middle would need to step it up. Or, demand that the feds stop spending at the level they do.
Before you accuse me of being a Republican or whatever, I am not. I am an independent pragmatist with an overly strong bent toward fairness and economic conservatism.
I may have joined this late and have to give the ole facepalm to this one page 1 doosie... This is statistical misinformation at its finest. You apparently have fallen hook, line, and sinker. Truly rich people do NOT make their money from salaries or their "job" like us schleps. They earn their money through investments (and I will use that term loosely)... they don't pay "income tax" the way you represent it here. The income they are paying taxes on is not representative of their actual income. It's hide the salami. This is one of the reasons you won't see Trump release his tax returns.
So your "top 1 percent of taxpayers" is not the same as the top 1%. Let that sink in.
Income inequality is not "liberal propaganda", it has been a serious issue globally for a long time. It's now coming home to roost in the US of A and it $#@! blows. We were the shining star of the world because of the opportunities afforded people coming here. Now that is long gone and it's simply about lining the pockets of special interests who have completely taken over our government. If you think for one second anything in that piece of crap tax reform proposal is going to help the economy, I need to get my hands on what you're smoking.
You're correct on spending, I agree 100%. But the GOP only cares about spending when Dems are in control. Once they get in control, the debt is meaningless and the credit limit just keeps going up. It's all a colossal dumpster fire where the left blames the right and the right blames the left. You call yourself Independent (so do I), but you sure seem to take a lot for granted. Life is not fair, so stop pretending it is. At some of the most prosperous times in the history of this country we taxed the living crap out of the rich. Unthinkable amounts in today's world. It's not "fair" how most of those people make all the money they do, but we have to be fair in taxing it? Naive, dude, naive.
If you want to play with statistics, let's talk about how much of the entire wealth in this country is owned by the top 1%. It's embarrassing and for someone who preaches fairness, you should be calling BS on it, too.
I may have joined this late and have to give the ole facepalm to this one page 1 doosie... This is statistical misinformation at its finest. You apparently have fallen hook, line, and sinker. Truly rich people do NOT make their money from salaries or their "job" like us schleps. They earn their money through investments (and I will use that term loosely)... they don't pay "income tax" the way you represent it here. The income they are paying taxes on is not representative of their [/i]actual[/i] income. It's hide the salami. This is one of the reasons you won't see Trump release his tax returns.
So your "top 1 percent of taxpayers" is not the same as the top 1%. Let that sink in.
Income inequality is not "liberal propaganda", it has been a serious issue globally for a long time. It's now coming home to roost in the US of A and it $#@! blows. We were the shining star of the world because of the opportunities afforded people coming here. Now that is long gone and it's simply about lining the pockets of special interests who have completely taken over our government. If you think for one second anything in that piece of crap tax reform proposal is going to help the economy, I need to get my hands on what you're smoking.
You're correct on spending, I agree 100%. But the GOP only cares about spending when Dems are in control. Once they get in control, the debt is meaningless and the credit limit just keeps going up. It's all a colossal dumpster fire where the left blames the right and the right blames the left. You call yourself Independent (so do I), but you sure seem to take a lot for granted. Life is not fair, so stop pretending it is. At some of the most prosperous times in the history of this country we taxed the living crap out of the rich. Unthinkable amounts in today's world. It's not "fair" how most of those people make all the money they do, but we have to be fair in taxing it? Naive, dude, naive.
If you want to play with statistics, let's talk about how much of the entire wealth in this country is owned by the top 1%. It's embarrassing and for someone who preaches fairness, you should be calling BS on it, too.
OK--that could change--
It could be phased in for 12.31.18
They are trying to capture cap gains taxes for THIS tax year with that effective sales date...
We have second home in FL as well as one in DFW TX--have owned both for more than 5 yrs
Now that husband is retired full time we spend about half and half FL and TX but claim homestead in TX since that is more expensive home and where our Medicare/Medigap has listed address and where our wills were done...
Depending on your HOA it is possible to rent the home out if you want to travel and still claim it as primary residence
You can refinance to get money out if you feel it has appreciated, keep it as primary residence, rent it out part of the year, and rent in other area
Maybe do house swap time with people in various areas/countries
I think might see more use of property by some people like that if they need to delay the sale date...
If you feel that you have been biding your time where do you want to go?
Will you need employment or are you retired?
I was wondering about this myself, and also where the OP might be getting their information regarding the 12-31-17 implementation date.
It's so difficult to find the links to confirm the exact legal language regarding these things.
Where are you seeing that it may be 12.31.18? This implementation date would certainly be a relief to many, who would otherwise be caught off guard if the change occurred within the next month or so.
I just meant the bill is going to be whacked when it gets to the floor if they want it to pass--
There are potentially 7 GOP Senators that could refuse to vote for it in present form (if we know what that really is)...
I think all provisions except the one for corporate taxes are supposed to be live on signing
But they could be changed -- like this property tax provision -- it COULD be pushed out to 18 but it likely won't
The GOP has to have SOME revenue coming back in
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