Re: [taxchat] Corp Health Expenses

And the frsutrating part is that an S-Corporation can't do the plan for a 2% or more shareholder as far as I'm aware.

On 9/24/08, Debbie Breedlove <dbreedlove@hotmail.com> wrote:

That type of arrangement would be a Sec 105 plan, but the company is not allowed to discriminate.  They must do the same for all employees.  If not, I don't think it qualifies. 

 

From: Cris Kelly

Sent: Wednesday, September 24, 2008 4:50 PM

To: taxchat@yahoogroups.com

Subject: [taxchat] Corp Health Expenses

 

I have a corp where the corp pays all the copays and extra medical expenses for the sole shareholder that Kaiser doesn't cover.   The corp doesn't do this for any other employee.

I think that the amounts should be posted as items that were paid on behalf of the shareholder and not as a deductible employee benefit expense for the corp.

I have heard both arguments.

               Yes it is a deductible benefit for the shareholder if in the employee shareholder contract it is stated that the company will pay any additional out of pockets costs for medical expenses.

               No it is not a deduction.  The individual has to pay on their own.  They can track those personal expenses and reco on schedule A.

I tend to go with no deduction for the corp, but I know that I am conservative.

I would like to hear everyone's else opinion.  I tried to find anything in writing about this issue but I couldn't find anything.

Thanks for the input.

Cris

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