Discussion Archives:H/W issue for S/H Medical of S-Corp

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Discussion Forum Index --> Advanced Tax Questions --> H/W issue for S/H Medical of S-Corp


Discussion Forum Index --> Tax Questions --> H/W issue for S/H Medical of S-Corp

Curious71 (talk|edits) said:

20 March 2008
Hi all! I have a unique situation regarding s/h medical of an s-corp. Husband and wife are employed by S-Corp. Husband is more than a 2% shareholder. A group plan established by the s-corp, in the name of the s-corp, covers all shareholders and it's employees. The individual policy under the group plan for the husband and wife is under the wife's name. It was cheaper that way. Would the IRS exclude the shareholder from taking the page 1 adjustment just because the medical application for the family was completed under the wife's name? What do you think?

Taxwizard (talk|edits) said:

20 March 2008
No, see Notice 2008-1.

Edcosoft (talk|edits) said:

20 March 2008
2% stockholder inellegible for line 29 deduction because a subsidized plan is available to his wife's through her employer, and also the corp is probably paying for it all anyway (can't get it free and then deduct).

ed

JR1 (talk|edits) said:

March 21, 2008
Unique situation? You're kidding, right? Maybe use the search box to the left there, and you'll be shocked at how 'un-unique' you are....

Taxwizard (talk|edits) said:

21 March 2008
Under the rules of attribution, the wife is treated as a more than 2% shareholder. Thus, the wife's participation would not be treated as a subsidized participation.

Curious71 (talk|edits) said:

21 March 2008
My point exactly Taxwizard. Not only did I reference the legislation but I also consulted with colleagues prior to sounding off on this board. I wanted an unbiased opinion. My colleagues and I all agree that the rules of attribution applies. However, this new controller absolutely refuses to acknowledge it. I even brought it up to the Tax Preparer who completed the 1120S. Needless to say, the premiums were not included in his wages and the s-corp took the deduction.

Thanks for taking the time and further validating my point.

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