2 min read
Sources:
Form 1-A, Kevin's account
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Short answer
House Hack, Inc. is a Wyoming corporation taxed as a C corporation, which is what lets it pay a qualified dividend on the preferred stock. Kevin’s account of the structure: the company pays roughly 29% combined federal and California tax on profits, versus more than 50% if he took the same income personally; depreciation on the real estate shelters much of the high-margin software income; 2022 and 2023 startup losses and expected R&D credits offset future tax; gains from buying below market go untaxed until sale; and his shares would get a stepped-up basis for his children. That is his description of a strategy, not tax advice. 12
Entity: C corporation (Wyoming, formed June 22, 2022)
Combined rate, Kevin's figure: ~29% (federal plus California, his estimate)
Personal alternative: 50%+ (top California brackets plus NIIT, his estimate)
The structure
House Hack, Inc. was formed in Wyoming on June 22, 2022 and is taxed as a C corporation. That choice sits underneath the whole offering: only a C corporation pays dividends that can be qualified dividends in the holder’s hands, and the company’s strategy of holding real estate for the long term inside an operating business depends on it. 1
Kevin’s account of why
Kevin’s account
The company is a C corporation paying about 29%, federal corporate plus California state. If I took that revenue home personally, I would pay over 50% at California’s top tiers plus net investment taxes. Instead, high-margin software products released through the corporation are taxed at the corporate rate, but much of that tax is offset because the company depreciates its real estate, which it maintains and expenses repairs on, believing the properties actually appreciate. Software revenues are sheltered by depreciation; rents come in while maintenance is written off; 2022 and 2023 startup losses and expected R&D credits further offset future taxes; unrealized real estate upside is untaxed; and my shares would get a stepped-up basis for my children. I call it possibly one of the most insane tax arbitrages, the ultimate American tax strategy. That is my description of the strategy, not tax advice. 2
Reading that carefully
Each piece of the account maps to something in the filings. The software and membership income appears in the Form 1-SA, $1,771,850 net for the first half of 2026. Depreciation on $65.9 million of real estate appears in the same statements. The accumulated deficit of $7,555,192 at June 30, 2026 is a book figure; the tax losses available to offset future taxable income are computed separately on the returns and are not disclosed in the filings. What the filings do not do is promise that any of it produces a particular tax rate; that depends on how each year plays out.
What it means for a preferred holder
Two things. First, the company’s cash tax bill is likely to be lower than its pre-tax profit suggests for as long as depreciation runs ahead of income, which leaves more cash for dividends and purchases. Second, the dividend you receive is a dividend from a C corporation, which is the precondition for qualified-dividend treatment. Whether a dividend you receive is qualified, and what you pay on it, is a question for the offering circular and your own adviser; this site does not cover the offering.
Software profits taxed at the corporate rate, sheltered by real estate depreciation, with untaxed equity underneath. Kevin calls it the ultimate American tax strategy. The filings call it a C corporation. 12
Simply put
✅ What a C corporation is
➡️ A company that pays its own tax, separate from its owners. Investors get taxed again only when they receive dividends.
➡️ It is the structure that lets Reinvest pay a "qualified dividend," which is taxed at lower rates than interest for most people.
✅ Why Kevin likes it
➡️ Course and software money goes into the company, where the tax rate is about 29%, not 50% plus.
➡️ The company writes off depreciation on its buildings every year, which cancels out a lot of that tax on paper.
➡️ Buying a building below market creates value that is not taxed until you sell.
✅ What this is not
➡️ Not tax advice. Your own dividend tax depends on your bracket and your state. See the note on qualified dividends.
Sources
Form 1-A, Summary and Description of Securities (Wyoming corporation; dividend tax discussion) Open the filing
Kevin's account, The tax structure: “The company is a C corporation paying about 29% (federal corporate plus California state). If I took that revenue home personally, I'd pay over 50% at California's top tiers plus net investment taxes.” Read the excerpt
