s corporation
Shareholder Cannot Make S Corp. Separately Stated Item Election
S corporation’s account for separately stated items that flow through to the shareholder’s tax returns. They are computed on page 3 of the Form 1120S and then listed separately on the Schedule K-1. The idea for breaking these items out sepa…
Guaranteeing a Loan for Your S Corporation
In Phillips v. Commissioner, No. 17-14439 (11th Cir. 2018), the court concluded that a judgment against the owner of an S corporation for guaranteeing the business debts does not increase the owners tax basis in the S corporation. This is one area whe…
Court Says Rent Income from S Corp Not Subject to Self-Employment Taxes
In Martin v. Commissioner, 149 T.C. 12 (2017), the court concluded that S corporation shareholders can avoid self-employment taxes by holding their farming operations in their S corporation. While the court case considered farming operations, its holdi…
IRS Says Personal Expenses Paid by S Corp. Not Loan Repayments
If a Subchapter S corporation pays its shareholder’s personal expenses, can the payments be for the repayment of loans not subject to employment instead of wages subject to employment taxes? This is a common issue that has to be addressed when preparing S corp. tax returns. The IRS addressed this in AOD 2017-04, which was […]
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