Discussion:Where to deduct state taxes

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Dennis (Talk | contribs)
(Schedule D would)
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{{ForumReplyPost|UserID=Dennis|Date=12 May 2006|Text=Schedule D would be the place, however considering what the payments were for I would wonder about the effects on corporate income when the original events occurred. Were the sales taxes determined to be due actually included in gross income? And the state withholding taxes? What exactly happened there?}} {{ForumReplyPost|UserID=Dennis|Date=12 May 2006|Text=Schedule D would be the place, however considering what the payments were for I would wonder about the effects on corporate income when the original events occurred. Were the sales taxes determined to be due actually included in gross income? And the state withholding taxes? What exactly happened there?}}
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 +{{ForumReplyPost|UserID=Foxttron|Date=12 May 2006|Text=I will be very careful about deducting anything. Sales taxes and withholding are "trust fund", so, if they were not paid when due, theoretically the owner of the S corp took "excess" cash (i.e. these taxes) for personal use. Based on your short explanation, I think there is nothing to deduct. }}

Revision as of 13:56, 12 May 2006

Discussion Forum Index --> Tax Questions --> Where to deduct state taxes

Aciccone (talk|edits) said:

11 May 2006
I have a client who paid state taxes personally (withholding, sales) for a S corporation that was dissolved five years previously. My question is where to deduct???

1. as a state tax deduction they gets hit for amt. big time 2. on schedule E page 2 as if a s corporation (which does not exist) 3. or sch a misc deductions not subject to 2%.

Thanks. First time asking questions.

Used site during tax season got many answers thanks everyone. who had time in tax season

DZCPA (talk|edits) said:

12 May 2006
How much?

WesR (talk|edits) said:

12 May 2006
Hi I would treat it as additional stock basis in the S corp and deduct on sch D. bye

Taxref (talk|edits) said:

12 May 2006
I do it the same way as WesR. The only problem is that you get limited to $3k total capital loss per year.

Taxref (talk|edits) said:

12 May 2006
Sorry, I should have added: unless you are able to use the losses to offset any capital gains.

Dennis (talk|edits) said:

12 May 2006
Schedule D would be the place, however considering what the payments were for I would wonder about the effects on corporate income when the original events occurred. Were the sales taxes determined to be due actually included in gross income? And the state withholding taxes? What exactly happened there?

Foxttron (talk|edits) said:

12 May 2006
I will be very careful about deducting anything. Sales taxes and withholding are "trust fund", so, if they were not paid when due, theoretically the owner of the S corp took "excess" cash (i.e. these taxes) for personal use. Based on your short explanation, I think there is nothing to deduct.
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