I understand the concept, that people does it for tax advantages and I would understand the concept for a period of maybe up to 3-5 years but not for 10 years + while assets are growing tremendously.
The answer “tax fraud” is a little bit to easy because it doesn’t pop up the whole time.
I didn’t found the answer on the first google page but I’m also happy with an simple url 🙂
Thx for your time
In: Economics
Its often possible (especially if you’ve got good accountants) to find ways to count lots of living expenses as “business expenses”. If you work for someone else, you get your salary, pay tax, and buy a car with the leftover. If you own a business, you can probably have the business buy the car, and show that much less “profit” but you still have the new car.
Also, you can reinvest most of your profit back into the business, which means its no longer treated as profit, but as the owner of the business your net worth has increased.
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