For those who are unfamiliar with Captive Insurance, under section 831(b), forming a Captive Insurance company allows businesses to proactively create a dedicated asset base to fund losses, improve cash flow, and provide investment income. As long as they meet the requirements, including a premium limitations amount that do not exceed $2.3 million annually, Captive Insurance companies may elect to be subject to an alternative tax based only on taxable investment income. Under this alternative tax, the underwriting profits of the insurance company are exempt from federal income tax.
Aside from offering insurance coverage for unique claims such as Government Intervention, Loss of License or Interruption of Licence, any Business Interruption including Crop Failure, Key Employee Loss, Key Vendor Loss, Liability and more, opening your own Captive Insurance company is a mechanism to use before tax dollars and convert them into capital gains which are taxed at a lower rate. For additional savings you can leave your dollars in the Captive company, and borrow against them on a 30 year term, whereby you only have to pay the interest on the loan. Your dollars are fully protected within the Captive company from any creditor including the IRS.
Cannabis Captive Insurance is proud to offer full industry experts offer full-service managerial assistance. Our industry experts offer the highest caliber of award-winning global tax services including legal and accounting services, administration, registration, conducting audits, claims management, compliance, and general management of the captive. Our full-service managerial and advisory firm has the experience of over 300+ Captive cases. Captive Insurance Companies are often overlooked as a strategic initiative by finance and tax professionals, as the benefits are not easily understood or explained. With the proper guidance, the economic advantages of a Captive program become readily apparent.
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