Discussion:Jlcl’s questions about sale-leaseback and SEP for S-corp
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Discussion Forum Index --> Consumer Questions --> Jlcl’s questions about sale-leaseback and SEP for S-corp
| 4 March 2009 | |
| The following are two questions that were appended to the end of existing discussions on the tax forum last night and today by Jlcl. Since Jlcl is not eligible to use the tax forum (reference his December 9, 2008 post: “I'm trying to decide if I should do a S-corp in 2009. I am currently a schedule C filer….” and his Feb 18 questions about how to set up his new S corp books), his posts have been moved to this new discussion in the Consumer Forum. | |
| 4 March 2009 | |
| If the owner of the s-corporation do a sales-lease back transaction to sell the equipment to the adult son (who's in a lower tax bracket) and lease back the equipment to the corporation,
1. Owner can deduct equipment lease expenses and have less s-corporation K-1 income (owner is in a much higher income tax bracket) 2. If son has own full-time job, then is the lease income generated considered Schedule E passive income or Schedule C income subject to SE tax? Since son has a full-time job, can one argue that "rental of personal property does not rise to a trade or business" thus can report under Schedule E as a passive income since son is not in the profession of equipment rental business? | |
Arman barsamian (talk|edits) said: | 4 March 2009 |
| Personal property rentals are reported as other income on form 1040 with expenses as an adjustment for gross income.
See Publication 17. | |
Arman barsamian (talk|edits) said: | 4 March 2009 |
| A strong and credible appraisal is needed for any related party leaseback transaction. | |
| 4 March 2009 | |
| The IRS website Q&A on SEP IRAsays:
"What is the timeframe for depositing contributions into SEP-IRAs? Contributions for a year must be deposited by the due date (including extensions) for filing your Federal income tax return for the year. " So, can a Schedule-C Sole proprietor who is NOT filing an extention file the tax return prior to April 15th then open the SEP IRA account and fund it by Oct. 15th of this year. The Sole-P wants to make the contribution later this year. Or, the TP can partially fund it before Apr. 15th then deposit the remainder of the funding before Oct. 15th. If that's okay, can someone direct me to the source that it's okay to do that. I can't find it anywhere. | |
