Tax News and Discussion

I currently own a printing company, in NC filing as a sole proprietor that is doing fairly well for as a side gig.

I’d like to start a rental company to remove assets from the printing company in the event of a liability and obviously generate additional income.

Keep in mind the ultimate goal is to reduce taxable income to as close to 0 as possible.

My question is, could my printing LLC rent printing equipment from my rental company? Of course, there will be legitimate rental contracts for the rental items that will detail costs and payments and ultimately will be signed by both company’s as “My Name - Managing partner of Printing LLC” and “My name - Managing partner of Rental LLC”

So far, is this legal? If so, yay. If no, how could it be structured to work like the fore mentioned scenario?

Next step in lowering taxable income -

Since the printing LLC is now renting equipment from rental LLC, the printing LLC will have lowered its taxable income via rental and maintenance contracts. Yes it’s still making a profit but not nearly as much.

At this point the Rental LLC should be off to a great start with solid cash flow, and able to deduct printing purchase costs. Even after the hardware deductions, Rental LLC is showing profit. Can I make a large purchase to rent out to others such as heavy equipment with Rental LLC and start depreciating this ~100k purchase over the next few years to net zero my Rental LLC?

TIA