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Key Management Investing

Many C Corporations offer key individuals the ability to invest at the Corporate level. Dividends paid to a qualifying C Corporation account are 75% tax free to the corporation. If the corporation retains less than $250,000 in their retained earnings account any gain can be taxed at 15%. If these funds are voluntarily contributed by the employee, he may want to complete an agreement with the corporation as a deferred compensation. The employee might want to consider using a Rabbi Trust, etc., to assure proceeds are available.

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