Collections · TTM
$1.85M
Brightwater Dental Group · S-corp
Owner W-2 + distributions
$220K + $410K
salary calibration → comp study
Structural levers modeled
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comp · PTE · retirement · equipment · building
Vault coverage
—
computed from evidence objects — never typed
What the structure is worth — modeled, gated, both ways
five levers · every determination routedmodeled
Compensation calibration (payroll delta at the band)—
CA PTE election — modeled federal benefit—
Retirement stack — owner-side capacity (net of staff cost shown in-engine)—
Equipment year-one federal acceleration (CBCT scenario)—
QBI on the practice (SSTB, over threshold)$0 · settled — cliff shown in-engine
Every figure above is a modeled range. Characterizations route to your CPA; plan design to the actuary and plan counsel; elections are papered before they are real.
Standing flags — addressable, never quietly resolved
PRC.char.reascomp — salary vs. band is the CPA's call; the band requires the comp study
PRC.pos.pte — election suitability (TMT · multistate) routed
PRC.char.grouping — §1.469-4 election is binding; both branches computed
PRC.char.fairrent — related-party rent needs market support in the vault
The deliberate-NO list
by design, never hiddenPositions this workstation will not model as defensible:
- No reasonable-comp figure past modeled without the comp study — the study is the evidence object the calibration points at.
- No PTE election defaulted — both branches render with the June-15 prepayment cliff; the CPA elects.
- No SSTB determination defaulted — the QBI phase-band is a facts question, routed.
- No self-rental restructuring instruction — §469 recharacterization is the trap the buildings panel renders, not solves.
- No plan design — the cash-balance tier is illustration-only; §§411/412 actuarial certification required before anything firms.
Compensation calibration
the needle is the model — the band is the evidencemodeled
$220K
$120Kcomp-study band$320K
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The savings branch
—
Combined payroll tax avoided on the distribution slice vs. paying it all as salary — real, and entirely dependent on the salary being reasonable.
The audit branch
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Below the study band, the IRS recharacterization exposure is the same math in reverse — Rev. Rul. 74-44, Watson. The band, not the savings, is the defense.
Payroll tax at current salary (combined, simplified)—
Show the math (E1 · practice_tax_logic)
payroll(s) = min(s, ssWage)·12.4% + s·2.9% + max(s − medThresh, 0)·0.9%Basis: §3121 wages · §1366/§1368 distributions · §3101(b)(2) additional Medicare · reasonable-comp doctrine (Rev. Rul. 74-44; Watson v. U.S., 668 F.3d 1008). Config: ssWage $184,500 (TY2026, registry-verified) · MFJ threshold $250,000 (statutory). Flagged simplifications: employer+employee rendered combined; the employer half is itself deductible (second-order, not netted); CA payroll items excluded.
Reasonable compensation is the CPA's determination. The band renders from the comp-study evidence object (PRC.evid.comp) — without it, everything on this panel stays modeled.
CA pass-through-entity election
the entity pays the state tax — the federal deduction comes backrouted · CPA
35%
Elect — entity pays 9.3%
—
PTE tax — deducted at the entity, outside your personal SALT cap; CA credit offsets your CA tax dollar-for-dollar (nonrefundable, 5-year carryover).
Don't elect — pay personally
capped
The same state tax runs through your itemized SALT deduction — capped at — (TY2026, income phase-down applies). Above the cap, the federal deduction is simply lost.
Modeled federal benefit of electing—
Show the math (E2 · practice_tax_logic)
pteTax = K-1 × 9.3% · federalBenefit = pteTax × marginalElect branch: the entity deducts the state tax above the line — outside the personal SALT cap — and the owner takes a dollar-for-dollar CA credit (nonrefundable, 5-yr carryover). Don't-elect branch: the same tax runs through itemized SALT, capped (TY2026 cap from config, income phase-down applies) — above the cap the federal deduction is lost. Basis: R&TC §§17052.10, 19900–19906 (extended through 2030) · IRS Notice 2020-75. Flagged simplifications: tentative-minimum-tax interaction not modeled; multistate owner credits excluded; both are the CPA's territory.
Deadlines derive from this election: June 15 prepayment — greater of 50% of prior-year PTE tax or $1,000 (miss it, lose the year) · election made on the timely-filed return. Both appear on the calendar automatically.
Election suitability routes to the CPA — tentative-minimum-tax interaction, multistate owners, and consent mechanics are facts-and-circumstances. Basis: R&TC §§17052.10, 19900–19906 (extended through 2030); IRS Notice 2020-75.
Retirement stack — with the staff cost shown
a practice is not a solo shop; the honest render includes what your shelter costsactuary · plan counsel
default
Owner employee deferral (age 47 — no catch-up yet)—
Employer profit-sharing to the §415(c) limit—
Owner DC total—
Safe-harbor 3% nonelective on staff — the counterweight—
Cash-balance tier — actuarial illustration only (age-banded)—
Show the math (E3 · practice_tax_logic)
deferral = §402(g) limit · profitShare = min(25% × W-2, §415(c) − deferral) · safeHarbor = staff × 3%Cash-balance tier is an actuarial illustration only (§415(b), age-banded) — the actuary certifies before funding; §401(a)(4) testing is the professionals’ lane. Config from registry (TY2026). Flagged: catch-up n/a at 47; §404(a)(7) combined limit renders when DB+DC coexist.
Deferral, not free money. Every dollar here comes back out as ordinary income later; the win is timing, bracket arbitrage, and creditor posture — and nondiscrimination testing (§401(a)(4)) is the professionals' lane, never computed here.
Plan design routes to the TPA; the cash-balance tier requires the actuary's certification and plan-counsel letter (PRC.evid.actuary · PRC.evid.plan) before any figure leaves illustration.
Equipment — federal vs. California, side by side
the CBCT scenario · §179 vs. 100% bonus vs. straight MACRSrouted · CPA
default
Federal — year one
—
§179 expensing or 100% bonus (acquired and placed in service after 2025-01-19, Notice 2026-11) each reach the full basis; straight 5-yr MACRS year-1 would be —. Ordering between §179 and bonus routes to the CPA.
California — the same purchase
—
CA does not conform to bonus depreciation, and CA §179 caps at $25,000 (R&TC §17255). The state deduction spreads over the MACRS life — two ledgers, one machine, both shown.
Federal year-one acceleration vs. straight-line—
NPV twin — time-value of accelerating at the recovery midpoint—
Show the math (E4 · practice_tax_logic)
fed yr-1 = min(cost, §179 cap) · CA yr-1 = min(cost, $25K) + remainder × MACRS-Y1 · accel = fed − MACRS-Y1 × cost§179 cap $2.5M (OBBBA statutory 2025; TY2026 indexation = registry lane) · 100% §168(k) bonus is the alternative for property acquired & PIS after the CFG date · California non-conformity is the honest split — $25K §179, no bonus. NPV twin:
accel × marginal × (1 − (1+dr)^−mid) — acceleration is timing, not free money.
Placed-in-service is an evidence-backed fact — invoice plus installation record (PRC.evid.pis). Operatory buildout is 15-yr QIP, bonus-eligible; that branch models on ask.
§179-vs-bonus ordering, de-minimis safe harbor interplay, and the CA adjustment route to the CPA. Basis: §179 (OBBBA §70306 — TY2026 indexation pending verification, registry lane) · §168(k) · R&TC §17255.
Building & self-rental — the asymmetry, stated
Brightwater Properties LLC rents to the practice at $96K/yrrouted · CPA
Annual rent, practice → building LLC (papered lease on file)$96,000
The §469 self-rental trap, rendered before it bites.
Net rental income from a self-rental is recharacterized non-passive (Reg. §1.469-2(f)(6)) — it cannot absorb your passive losses. Net rental losses stay passive. The rule is an asymmetry aimed at exactly this structure; this desk shows it instead of hiding it.
Group — §1.469-4 election
one activity
Practice + building treated as a single activity: the trap dissolves, but the election is binding until facts materially change, with a disclosure statement (Rev. Proc. 2010-13) as the evidence object.
Stand separate
two activities
Keeps the building's liability isolation clean and the exit optional — and lives with the recharacterization asymmetry. Cost-seg on the building rides the study evidence either way.
The grouping election is the CPA's determination — computed both ways here, defaulted never. Fair rent requires market support in the vault (PRC.evid.lease); related-party rent without it is the classic exam opener.
QBI reality check — dentistry is an SSTB
Reg. §1.199A-5(b)(2)(ii) names health explicitly; the cliff is the honestysettled · shown
default
Where you are
—
—
If taxable income were under the threshold
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20% of qualified business income — computed so the cliff is visible, not to suggest the income should move. Threshold anchors are TY2025 ($394,600 MFJ) with the OBBBA phase-in band; TY2026 indexation pending, registry lane.
Show the math (E6 · practice_tax_logic)
Health is a named SSTB — Reg. §1.199A-5(b)(2)(ii). Under the threshold (CFG; TY2025 anchor, TY2026 = registry lane) the taint does not bite: 20% of QBI computes. Inside the phase band the disallowance is proportional — routed. Past the band: zero, stated plainly. Aggregating the building rent is a grouping determination — routed, never auto-answered.
The building LLC's rental income is not automatically an SSTB — but aggregating it with the practice is a routed determination, never an auto-answer.
Over the full phase-out, SSTB QBI is $0 — settled law, stated plainly. In-band precision and any aggregation route to the CPA. Basis: §199A(d)(2) · Reg. §1.199A-5(b)(2)(ii) · OBBBA §70105.
Structure map
practice S-corp · building LLC · retirement plan — rent and contributions paperedevery edge = a ledger row
Intercompany ledger
every dollar between entities — priced, papered, lifecycle-tracked| Date | Flow | Purpose · instrument | Amount | Lifecycle |
|---|
One-sided rows surface as exceptions — an intercompany movement without both entries and its paper is a defect in the structure, not a bookkeeping detail.
Document vault — evidence objects
a lever stays modeled until its object exists hereCoverage—computed, never typed
Audit-defense file
if the examiner calls, this is what's readyPositions ratified or evidenced—
| Position | Owner | Evidence | State |
|---|
Tax calendar
including the June prepayment that decides the PTE yearAide
plain-words intake · routed, never adviseddemo script
We're buying a second CBCT in November and my spouse says we should pay ourselves less salary this year. Good idea?
Two separate questions — here's what the desk can show and who owns each answer. The CBCT: the equipment engine models it three ways federally (§179 · bonus · MACRS) and shows the California ledger beside it — the CA add-back is real money and often surprises. The placed-in-service date is the fact that matters; the invoice and installation record go in the vault. The salary: the compensation engine will show the payroll-tax delta of any move — and it will also show the audit branch. Whether a lower number is reasonable is your CPA's determination against the comp-study band, not this desk's and not your spouse's. Both engines are one click away; both verdicts route.
The aide explains screens and routes questions. It does not give tax, legal, or accounting advice — the disclaimer below applies to every word it says.