Discussion:S Corporation Basis - source of initial capital contribution

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Revision as of 15:13, 29 October 2009
Harry Boscoe (Talk | contribs)
(I would point ou)
← Previous diff		 Revision as of 15:14, 29 October 2009
Smokeytax (Talk | contribs)
(You're assuming)
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Belmont, post your profile, will ya? }} Belmont, post your profile, will ya? }}
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 +{{ForumReplyPost|UserID=Smokeytax|Date=29 October 2009|Text=You're assuming the auditor understands debits and credits.}}

Revision as of 15:14, 29 October 2009

Discussion Forum Index --> Basic Tax Questions --> S Corporation Basis - source of initial capital contribution
Discussion Forum Index --> Tax Questions --> S Corporation Basis - source of initial capital contribution

Belmont8 (talk|edits) said:

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.

Davidcpa (talk|edits) said:

29 October 2009
How does he want to treat the $25k cash infusions? If not stock or loan...income? Debit cash...credit...

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?

Smokeytax (talk|edits) said:

29 October 2009
You're assuming the auditor understands debits and credits.
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