Custom Search

29 September 2008

Re: [taxchat] interest on a loan to S Corp by the shareholders

Stopping with the general purpose IRS Publications can give incomplete answers.   Per regs §1.267(a)-1(b)(1)(iii)  income is constructively received when it is available so that the related party had the ability to have drawn it -  which then overrides the rule in Pub 542 below .
 
I believe the problem is when the entity is on the cash basis... since there is no related "constructive disbursement" rule that I know of  ;-)

Colin Cody, CPA


 
----- Original Message -----
Sent: Monday, September 29, 2008 8:06 PM
Subject: Re: [taxchat] interest on a loan to S Corp by the shareholders

Awwww, shucks, Cris.  Since you called me a wonderful person, I just had to look this up for you.  I didn't have much time to spend on it because I'm kinda swamped right now, and I didn't have a cite because this was just one of those things I've always known, and I don't remember where I heard it.  I can give you this info that I found in Pub 542 (Corporations).  As you can see, this is a general rule that applies to most entities, not just corporations.  See Pub 542 for more info....
 
I hope this helps.
 

Related Persons

A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income......

Debbie B.

 
 
From: Cris Kelly
Sent: Monday, September 29, 2008 3:27 PM
Subject: [taxchat] interest on a loan to S Corp by the shareholders

I put this question up awhile ago, and Debbie B being the wonderful person that she is responded with the below.

"interest on loan to S Corp

An S-Corp cannot deduct accrued interest owed to a cash basis shareholder.  You can record the interest on the S-Corp books, but make an M-1 adjustment on the S-Corp tax return since it cannot be deducted until paid.

Debbie B"

The preparer doing their individual return wants to know why I am not deducting the amount on their return.  She does not think the ABOVE statement is correct.  I would also like to point out that she is the person that did the corp return the prior year and didn't include any interest calculation!

I am going to start trying to find this written somewhere; however, I thought if anyone knew they could give me some directions to narrow done by research.

Thanks for the help,

Cris

__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

Search Ads

Get new customers.

List your web site

in Yahoo! Search.

Featured Y! Groups

and category pages.

There is something

for everyone.

.

__,_._,___

Re: [taxchat] interest on a loan to S Corp by the shareholders

Awwww, shucks, Cris.  Since you called me a wonderful person, I just had to look this up for you.  I didn't have much time to spend on it because I'm kinda swamped right now, and I didn't have a cite because this was just one of those things I've always known, and I don't remember where I heard it.  I can give you this info that I found in Pub 542 (Corporations).  As you can see, this is a general rule that applies to most entities, not just corporations.  See Pub 542 for more info....
 
I hope this helps.
 

Related Persons

A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income......

Debbie B.

 
 
From: Cris Kelly
Sent: Monday, September 29, 2008 3:27 PM
Subject: [taxchat] interest on a loan to S Corp by the shareholders

I put this question up awhile ago, and Debbie B being the wonderful person that she is responded with the below.

"interest on loan to S Corp

An S-Corp cannot deduct accrued interest owed to a cash basis shareholder.  You can record the interest on the S-Corp books, but make an M-1 adjustment on the S-Corp tax return since it cannot be deducted until paid.

Debbie B"

The preparer doing their individual return wants to know why I am not deducting the amount on their return.  She does not think the ABOVE statement is correct.  I would also like to point out that she is the person that did the corp return the prior year and didn't include any interest calculation!

I am going to start trying to find this written somewhere; however, I thought if anyone knew they could give me some directions to narrow done by research.

Thanks for the help,

Cris

__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

New business?

Get new customers.

List your web site

in Yahoo! Search.

Discover Tips

on healthy living

and healthy eating

on Yahoo! Groups.

.

__,_._,___

RE: [taxchat] Kleinrock research

But Arnie, everything my practice spends money on gets marked up and passed along to my clients. Buying my research service, my tax preparation software, or my desk chair in a lump-sum purchase doesn’t mean my clients don’t pay for them.  It just makes the cost more difficult to allocate.

 

Chuck Warman,  CPA
Wichita Falls, TX
-------------------------------

 

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Arnold M. Socol
Sent: Monday, September 29, 2008 3:39 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Kleinrock research

 

......especially when you can markup your cost and pass it along to your client.

 

 

----- Original Message -----

From: Mel Wolfson

Sent: 09/29/2008 4:32 PM

Subject: RE: [taxchat] Kleinrock research

 

I've heard from some people that the "free" research offered with certain software packages is somewhat limited. I don't know if that applies to the Drake product or not.

 

My feeling is that if I do the research on my own, I'm liable to miss something critical since I'm not doing research all that often and I'm not always comfortable that I've found every important citation. Relying on an outside independent authority is worth paying for in my opinion.

 

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Robert Lukey
Sent: Monday, September 29, 2008 3:55 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Kleinrock research

I get free RIA research as part of my Drake software.

On Mon, Sep 29, 2008 at 9:38 AM, Mel Wolfson <mwolfso@optonline.net> wrote:

I've decided not to use a research software product. When I have an issue that requires research, I contact NATP. For a reasonable fee, they do the research and provide a written analysis alon with sites. In my case, its mich cheaper since I don't need research services that often.

 

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Chuck Warman
Sent: Monday, September 29, 2008 12:15 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Kleinrock research

I haven't been able to find as good a deal, but, like you, I'm still looking.

Chuck Warman,  CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Cris Kelly
Sent: Monday, September 29, 2008 10:22 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] Kleinrock research

I am not real happy about the changes at Kleinrock since CCH bought them.

Their costs have increased for what you get.

Does anyone have a research product that they have found comparable or at least a better deal?

Thanks for the input

Cris



__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Give Back

Yahoo! for Good

Get inspired

by a good cause.

Y! Toolbar

Get it Free!

easy 1-click access

to your groups.

Yahoo! Groups

Start a group

in 3 easy steps.

Connect with others.

.

__,_._,___

Re: [taxchat] Kleinrock research

......especially when you can markup your cost and pass it along to your client.
 
 
----- Original Message -----
Sent: 09/29/2008 4:32 PM
Subject: RE: [taxchat] Kleinrock research

I've heard from some people that the "free" research offered with certain software packages is somewhat limited. I don't know if that applies to the Drake product or not.
 
My feeling is that if I do the research on my own, I'm liable to miss something critical since I'm not doing research all that often and I'm not always comfortable that I've found every important citation. Relying on an outside independent authority is worth paying for in my opinion.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Robert Lukey
Sent: Monday, September 29, 2008 3:55 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Kleinrock research

I get free RIA research as part of my Drake software.

On Mon, Sep 29, 2008 at 9:38 AM, Mel Wolfson <mwolfso@optonline.net> wrote:

I've decided not to use a research software product. When I have an issue that requires research, I contact NATP. For a reasonable fee, they do the research and provide a written analysis alon with sites. In my case, its mich cheaper since I don't need research services that often.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Chuck Warman
Sent: Monday, September 29, 2008 12:15 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Kleinrock research

I haven't been able to find as good a deal, but, like you, I'm still looking.

Chuck Warman,  CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Cris Kelly
Sent: Monday, September 29, 2008 10:22 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] Kleinrock research

I am not real happy about the changes at Kleinrock since CCH bought them.

Their costs have increased for what you get.

Does anyone have a research product that they have found comparable or at least a better deal?

Thanks for the input

Cris



__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

New business?

Get new customers.

List your web site

in Yahoo! Search.

Yahoo! Groups

Balance your life

by learning how to

make smart choices.

.

__,_._,___

RE: [taxchat] Kleinrock research

I've heard from some people that the "free" research offered with certain software packages is somewhat limited. I don't know if that applies to the Drake product or not.
 
My feeling is that if I do the research on my own, I'm liable to miss something critical since I'm not doing research all that often and I'm not always comfortable that I've found every important citation. Relying on an outside independent authority is worth paying for in my opinion.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Robert Lukey
Sent: Monday, September 29, 2008 3:55 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Kleinrock research

I get free RIA research as part of my Drake software.

On Mon, Sep 29, 2008 at 9:38 AM, Mel Wolfson <mwolfso@optonline.net> wrote:

I've decided not to use a research software product. When I have an issue that requires research, I contact NATP. For a reasonable fee, they do the research and provide a written analysis alon with sites. In my case, its mich cheaper since I don't need research services that often.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Chuck Warman
Sent: Monday, September 29, 2008 12:15 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Kleinrock research

I haven't been able to find as good a deal, but, like you, I'm still looking.

Chuck Warman,  CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Cris Kelly
Sent: Monday, September 29, 2008 10:22 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] Kleinrock research

I am not real happy about the changes at Kleinrock since CCH bought them.

Their costs have increased for what you get.

Does anyone have a research product that they have found comparable or at least a better deal?

Thanks for the input

Cris



__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

Search Ads

Get new customers.

List your web site

in Yahoo! Search.

Yahoo! Groups

Familyographer Zone

Join a group and

share your pictures.

.

__,_._,___

[taxchat] interest on a loan to S Corp by the shareholders

 

I put this question up awhile ago, and Debbie B being the wonderful person that she is responded with the below.

 

 

 

“interest on loan to S Corp

 

An S-Corp cannot deduct accrued interest owed to a cash basis shareholder.  You can record the interest on the S-Corp books, but make an M-1 adjustment on the S-Corp tax return since it cannot be deducted until paid.

 

Debbie B”

 

 

 

 

The preparer doing their individual return wants to know why I am not deducting the amount on their return.  She does not think the ABOVE statement is correct.  I would also like to point out that she is the person that did the corp return the prior year and didn’t include any interest calculation!

 

I am going to start trying to find this written somewhere; however, I thought if anyone knew they could give me some directions to narrow done by research.

 

 

 

Thanks for the help,

 

 

Cris

 

 

 

__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

Yahoo! Groups

w/ John McEnroe

Join the All-Bran

Day 10 Club.

Cat Fanatics

on Yahoo! Groups

Find people who are

crazy about cats.

.

__,_._,___

Re: [taxchat] Kleinrock research

I get free RIA research as part of my Drake software.

On Mon, Sep 29, 2008 at 9:38 AM, Mel Wolfson <mwolfso@optonline.net> wrote:

I've decided not to use a research software product. When I have an issue that requires research, I contact NATP. For a reasonable fee, they do the research and provide a written analysis alon with sites. In my case, its mich cheaper since I don't need research services that often.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Chuck Warman
Sent: Monday, September 29, 2008 12:15 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Kleinrock research

I haven't been able to find as good a deal, but, like you, I'm still looking.

Chuck Warman,  CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Cris Kelly
Sent: Monday, September 29, 2008 10:22 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] Kleinrock research

I am not real happy about the changes at Kleinrock since CCH bought them.

Their costs have increased for what you get.

Does anyone have a research product that they have found comparable or at least a better deal?

Thanks for the input

Cris



__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

Women of Curves

on Yahoo! Groups

A positive group

to discuss Curves.

Yahoo! Groups

w/ John McEnroe

Join the All-Bran

Day 10 Club.

.

__,_._,___

RE: [taxchat] W-2, 1099 etc Filings

According to the web site, they can import from Quickbooks. However, I can do everything from within Quickbooks except e-file 1099s.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Lynn Snyder
Sent: Monday, September 29, 2008 12:14 PM
To: Taxchat
Subject: [taxchat] W-2, 1099 etc Filings

I wanted to let you know about filetaxes.com for W-2, 1099, 941 etc filing.  I love it.  For $3.79 per W-2 or 1099 it mails the recipient their copy and e-files with the IRS. You print your copy online and can go back anytime for more copies.  I have used it for 3-4 years and have never had a problem. Data carries over from year-to-year. I use it just for certain clients when it works best for them.

Have any of you used it, or a similar online service?  I do few W-2s and mostly print them from QB & mail them for my bookkeeping clients.

Lynn Snyder, EA
Enrolled to Practice before the IRS
Tax & Financial Solutions, Inc.
IRS Circular 230 Disclosure:
Any advice relating to a Federal tax issue contained in this communication, including in any attachments, was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

__._,_.___
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

Ads on Yahoo!

Learn more now.

Reach customers

searching for you.

Real Food Group

Share recipes,

restaurant ratings

and favorite meals.

.

__,_._,___
Langganan: Postingan (Atom)
Custom Search