Discussion:"Closed" business, still in existence
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Discussion Forum Index --> Advanced Tax Questions --> "Closed" business, still in existence
Discussion Forum Index --> Tax Questions --> "Closed" business, still in existence
| 10 January 2008 | |
| S-corp client has no business income in 2007 with assets of a bank account and vehicles and tools and liabilities of vehicle loans. Shareholder wants to keep the business open for the future but as the construction industry was non-existent for him last year, I guess the only deductible expenses would be those to keep the corporation open (i.e. accounting, insurance, licenses). Question is what to do with depreciation, fuel and interest costs on the vehicles - since the assets are still in the business with no activity do I presume that all use was personal and somehow do a constructive dividend of the use of the assets? Prepare a W-2 showing minor wages with fringe benefits? Any thoughts would be appreciated. | |
Death&Taxes (talk|edits) said: | 10 January 2008 |
| "do I presume that all use was personal and somehow do a constructive dividend of the use of the assets?" Do you know something we don't? I mean it is hard to see the client driving around in a back hoe, though I suppose he could have used it to improve his residence. Now if we are talking about a flat bed pickup, maybe that is another thing!
This might also boil down to were the assets taken out of service? I would doubt that, so to me the expenses are legitimate and keep the business alive. You would have to ask yourself if his activites rose to active participation, though since he must be the only officer, he probably contributes all the participation there is for the year. | |
| 10 January 2008 | |
| He is the only officer and employee, so is the only one who would be working if there was any business. I am just worried that I don't claim business expenses when there wasn't any business happening. He has two vehicles in the corporation. I'm thinking of deducting the interest and depreciation but recording any other expenditure related to the assets as distribution. | |
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