Discussion:1120S
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| Revision as of 23:55, 9 June 2006 Michaelstar (Talk | contribs) (These "loans" wi) ← Previous diff |
Revision as of 21:13, 10 June 2006 Scot1 (Talk | contribs) (Why not treat pe) Next diff → |
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| {{ForumReplyPost|UserID=Michaelstar|Date=9 June 2006|Text=These "loans" will also on audit be subject to be reclassified as wages if reasonable compensation has not been paid and reported. You also need a signed loan agreement. If there has not been any payments back to the corp against the loan, then the question if there was ever any real intentions to treat these draws as a loan will also be raised.}} | {{ForumReplyPost|UserID=Michaelstar|Date=9 June 2006|Text=These "loans" will also on audit be subject to be reclassified as wages if reasonable compensation has not been paid and reported. You also need a signed loan agreement. If there has not been any payments back to the corp against the loan, then the question if there was ever any real intentions to treat these draws as a loan will also be raised.}} | ||
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| + | {{ForumReplyPost|UserID=Scot1|Date=10 June 2006|Text=Why not treat personal expenses paid by the S corp as distributions rather than SH loans? If sufficient (reasonable) compensation is paid and there are not any basis issues, treat as distribution, rather than loan with terms, agreements, imputed, if not actual interest.}} | ||
Revision as of 21:13, 10 June 2006
Discussion Forum Index --> Tax Questions --> 1120S
Smf bookkeeping (talk|edits) said: | 9 June 2006 |
| At what point will the IRS question A/R Officers? The owner draws money out of the corporation for personal use (cars, boats, jetskis, house, pool etc. She has never contributed cash to the corp even in start up. | |
Michaelstar (talk|edits) said: | 9 June 2006 |
| These "loans" will also on audit be subject to be reclassified as wages if reasonable compensation has not been paid and reported. You also need a signed loan agreement. If there has not been any payments back to the corp against the loan, then the question if there was ever any real intentions to treat these draws as a loan will also be raised. | |
| 10 June 2006 | |
| Why not treat personal expenses paid by the S corp as distributions rather than SH loans? If sufficient (reasonable) compensation is paid and there are not any basis issues, treat as distribution, rather than loan with terms, agreements, imputed, if not actual interest. | |
