Three ways to avoid double taxation of a C corporation are:

1. Have the corporation pay you a salary. You'll be taxed on the salary, but the corporation will receive a tax deduction for the salary (if it had instead paid you a dividend, it wouldn't receive a tax deduction for the dividend). Make sure the salary is reasonable, or else the IRS will reclassify it as a dividend.

2. Lend money to the corporation. When the corporation repays the debt, you won't be taxed on the debt repayments (had the corporation instead paid you a dividend, you would be taxed). You will be taxed on the interest you receive, but the corporation will receive a tax deduction for this. Make sure the interest rate on the debt is reasonable, or else the IRS will reclassify it as a dividend.

3. Purchase property yourself and then lease it to the corporation. You'll be taxed on the lease payments you will receive, but the corporation will receive a tax deduction for those lease payments (if the corporation had instead paid you a dividend, you would have been taxed on the dividend but the corporation would not have received a tax deduction for the dividend). —
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