Discussion:Tax free employee bonuses
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Discussion Forum Index --> Tax Questions --> Tax free employee bonuses
Melonyward (talk|edits) said: | 27 December 2007 |
| WE have a new NH business. LLC Partnership. We would like to know what is the best way to "Bonus" the 2 partners with the least tax. | |
| 27 December 2007 | |
| Hi talk to your accountant your question needs a lenghty discussion on how partnerships are taxed. The short answer is there is none you are taxed whether you take it or not. bye | |
| 27 December 2007 | |
| Not necessarily a bonus, but...make sure that the partnership reimburses the partners for their *legitimate* business expenses incurred on behalf of the partnership. | |
Cigarmanpr (talk|edits) said: | 27 December 2007 |
| How about on a C Corp. I have a single owner C Corp that wants to give himself a tax free housing allowance (fringe benefit). Justification being that if the C corp requires the owner to live on the premisis then it should not be a taxable benefit. If the C Corp owned the property then they could allow the owner to live on the premisis with out counting it as a taxable compensation. The difference here is the C corp owner owns the property and wants the corp to pay the housing allowance. This seems questionable to me but I think it might work. Any ideas??? | |
| December 27, 2007 | |
| Why does the C Corp require him to live on the premises? | |
| 27 December 2007 | |
| We use this for dairy farms--need to be on premises, but I would be interested to see what other types of corps require them to line on premises, making their housing deductible??? | |
Cigarmanpr (talk|edits) said: | 27 December 2007 |
| The C corp requires him to live on the premises because he works out of his house. The office if the front of the house and he has an assistant office in the loft. He uses about 50% of the house for business on a regular basis. | |
Michaelstar (talk|edits) said: | 27 December 2007 |
| Cigarmanpr - I think not. The owner can rent this space to the Corp and report the full rental income - make sure you look up the self rental rules - but there is no way in my mind that the owner can receive a non taxable fringe benefit for this. There is no free lunch if that is what he is looking for. | |
Death&Taxes (talk|edits) said: | 27 December 2007 |
| The old 'give them an inch and they grab Sec. 119.' After implementing this housing allowance, there would have to be a clothing allowance for Armani suits since the officer must meet the public | |
| 27 December 2007 | |
| Hi, Michaelstar why do you even encourage these people to do something else they have no clue about? bye | |
| December 27, 2007 | |
| No Cigar. The arrangement you speak of is clearly for the employee's convenience, not the employer's convenience. He would not even qualify for a home office deduction as an employee of the corp unless the related office is used exclusively for business (regularly doesn't cut it). See D&T's reference to code section 119.
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Michaelstar (talk|edits) said: | 27 December 2007 |
| WesR - Just to tease them...... also, maybe some else may read this hijacked post and consider they need to look up the self rental rules when the owner of a corp who owns property and rents it to his corporation. But your right just the same. | |
Cigarmanpr (talk|edits) said: | 28 December 2007 |
| Thank you everyone for your response. I didn't think it would be a ligitimate deduction but wanted to ask for some other opinions. | |
| December 28, 2007 | |
| Cigarmanpr: glad you ran it by some others before hauling off and taking the deduction. Thanks for filling out your profile. Regards. | |
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