Making the most of the S Corp AAA

Hi guys,

I have a client that has amassed just over $8,000,000 in their S Corp's AAA account ("account" is redundant, I know). Like many other AAA's, it's sitting in a money market account paying 0.65%. And just like most other people currently in money market, the CFO is now looking for alternatives to squeeze out a few more percentage points, while still maintaining relative safety and liquidity.

I'm thoroughly versed on the various investment options floating about the universe. But I admittedly don't know much about S corp taxation and business practices. So, in your vastly superior experience, how do you guys see most larger AAA accounts managed?

thanks

Reply to
kastnna
Loading thread data ...

And here I thought saying there's $8,000,000 in AAA was like saying there's $8,000,000 in Accumulated Depreciation or $8,000,000 in Partner's Capital. I didn't know it meant there was that much cash laying around looking for a home.

Actually, that is what it's like saying. If there happens to be idle cash equal to the AAA balance, then what you have is a coincidence.

As for investment options, the risk-return trade off is alive and well. If your client wants a higher expected return, he will have to take more risk.

Reply to
Bill Brown

Maybe I'm abusing the use of the term "AAA". In essence, the $8M is what I would otherwise call "retained earnings". It is, essentially, amassed profits that the shareholders (only 3 of them) opted not to distribute.

Like I said, I can easily handle the suitability of the various investment options including liquidity and risk. I just didn't know if there was a particular investment vehicle that favorably lended itself to this type of situation.

Reply to
kastnna

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.