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I understand. Maybe I can put it in a way that would make it more clear.
Basically I am making an investment in a company. The return on my investment will depend on the profit of the company. The return on my investment will be paid every two weeks.
If it was allowed, I would make this investment using money from something like my Roth IRA, that way, I would not have to pay very high taxes on my return.
I am pretty sure I can't use my Roth IRA to make this investment. I am wondering what other types of investment accounts or business entities I could/should use to help with taxes.
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Oh, ok, totally different question. What you need is called a 'self-directed IRA'. There are a lot of rules for SDIRAs, but the gains are taxed-deferred. YOu can learn more about SDIRAs here:
http://www.penscotrust.com/education/IRAs.asp
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Thanks for the link. I have looked into Self-directed IRA's before and I really like the idea. But I don't think I am going to be able to take advantage of that with this oppurtunity at this time, unfortunately.
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Personally I'm not aware of any other way to selter earnings from a small biz investment other than a self-directed IRA. If you do find something let me know - I'll add it to my investor pitch.