Discussion:S Corporation Basis - source of initial capital contribution
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Discussion Forum Index --> Tax Questions --> S Corporation Basis - source of initial capital contribution
| 29 October 2009 | |
| I have an S corporation client who formed in 2006.
The inital capital contributions were as follows: $25,000 From the shareholder's Schedule C business checking account deposited directly to S Corp checking account - Payment treated as "Draw" on respective Schedule C books. $28,000 From the shareholder's personal checking account. I have a New York state auditor indicating the amount from the shareholder's Schedule C checking account is NOT basis (stock or loan basis) for the shareholder. He is planning to dissallow a portion of a loss in 2007 for this reason. He is stating that all contributions should be made from the shareholder's personal checking account to qualify as basis. Any ideas. Thanks. | |
Harry Boscoe (talk|edits) said: | 29 October 2009 |
| He's wrong. | |
| 29 October 2009 | |
| How does he want to treat the $25k cash infusions? If not stock or loan...income? Debit cash...credit... | |
| 29 October 2009 | |
| You're assuming the auditor understands debits and credits. | |
Harry Boscoe (talk|edits) said: | 29 October 2009 |
| I would point out that the Schedule C's checkbook *is* the taxpayer/sole proprietor/shareholder's checking account.
And that cash is the ultimate fungible commodity. Belmont, post your profile, will ya? | |
