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Comment by DoubleDerper | Hacker News Reader

it's not a conflict, it's a feature

It kind of is a feature. I had a boss once that owned the building to the business and charged rent to ensure zero profit.

It's like life is a realtime monopoly game I'm learning tactics all the time.

A bug for society is a feature for the elites that control it.

> I had a boss once that owned the building to the business and charged rent to ensure zero profit.

To be clear, I assume the company wasn't wholly owned by him, correct? Because if it was, it wouldn't be a conflict of interest.

It's not breaking fiduciary duty to the company if the company is wholly owned and in the interest of the owner. Or the transaction is in the interest of all the owners. It comes under transfer mispricing (transfer pricing manipulation) where transactions are not at arms length which it would not be if the same owner wholly owned both. It's not a highly policed area so it's legal insofar as people do usually get away with it. I think there will be crackdowns on it eventually, courts are more apt to pierce the corporate veil for solo-owned companies.

I think there are many changes coming down the pipeline as governments start running out of money. Capital gains tax normalization, capital gains tax treated as income every year instead of at a 'event' when you sell. An effective wealth tax by taxing a percentage of property value. Once those are in place I think they'll crack down on the creative use of corporations to minimize tax.

Not exactly unscrupulous if he wasn't charging insane rents to himself. His business would have to pay rent or mortgage for office space in any case. And the income his other business would get from the rent is taxable as well. At a certain point, he either has to break a law in an egregious manner and hope he does not get caught, or he has to pay taxes. That's the system we put in place when we start setting up income and corporate taxes to prop up a massive federal government.

How did that work? So the "company" pays the "landlord" so it shows zero profit but now the landlord has a profit right?

The landlord will use it to pay down loans, improve the property, and maybe invest in new property.

The OP likely isn't telling the full story or maybe doesn't understand what actually happened, like most people who talk about taxes online.

Society only functions so long as most people don't know these 'exploits'. Short of a rather intrusive totalitarian state I'm not sure how it would be possible to effectively police against such exploits. What's new is sharing information on exploits is much easier than it used to be and people feel less moral aversion to using them.

> I had a boss once that owned the building to the business and charged rent to ensure zero profit.

This is common and legal structure designed to, among other things, reduce taxes owed. It only becomes a problem if the business has shareholders who are not participating in the scheme to shift money to the land company.

Not for the same motivations, but a lot of legal cannabis businesses do (or did) something nearly similar to get around not being able to use the banking system:

Buy the building or even lease it with a sublet clause using a separate entity, and then lease/sublease the space to the cannabis business with the lease fee being, for example, "90% of gross revenue". I'm not sure on the details of how operating funds were pushed back in.

Sounds like a "sale and lease back"

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