1. S corporation owns two strip centers which are consistently at full occupancy (4-5 tenants each) and generate a profit. Husband/wife 100% owners manage all aspects of the property. There is no payroll and distributions of $100,000 are taken out annually. Question- is the S Corp requirement to pay reasonable wages prior to Distributions overshadowed by the fact the S corporation is involved in a rental activity?
2. Fact- person A owns 100% 1120s company 1 and company 2. Company 1 owns Building. Company 2 operates medical firm and pays company 1 rent. company 1 does not pay wages and only pays distributions to owner A… Question- Does common ownership or other situation allow company 1 to not pay wages and only pay distributions?
3. Question regarding HSA contributions made for an "S" Corp owner. I believe in the last "Q&A" you had said that an HSA contribution made for an "S" corp owner by the "S" corp is treated the same as medical insurance...that is...included in Box 1 and also in box 12, with code "W". If this is the case...then it would seem that the "S" corp owner would be including as income the HSA contribution...but would not be able to claim the deduction as code "W" would eliminate any deduction on his/her return. Would it not be better for the "S" corp owner to take a distribution from his "S" corp...then make the HSA contribution as an individual? This would allow him/her to take the deduction on their individual return...and also result in a larger "QBI" deduction since there would be no additional deduction flowing through the "S" corp while total income for the owner would still remain the same? Am I missing something here??
4. An employee had HSA withheld from salary in 2018 & it shows up on W-2 Box 14 W code but the employer never paid it into the employees HSA account. Employer is planning on giving HSA contribution back to employee in 2019 & have it show up as taxable wages on 2019 W-2. Is this action correct? What steps should employer & employee take to remedy this situation?
5. During your past 1040 classes, you’ve stressed filing form 706 to protect portability of exclusion to surviving spouse. This is my first 706 and there is an option to elect to waive portability. What would be reason to not want portability? I also heard to file simplified 706 if data is not readily available (for due date of 706) but you want to protect portability. Is a simplified 706 just a good estimate of account values?
6. I have a VERY generous elderly client who has received an IRS audit notice for charitable contributions. I have letters for all the donations from the charities but the IRS said that she also needs to provide copies of all the cancelled checks for the donations. I mentioned to the auditor that the IRS regulations indicate that you need a letter from the charity with all the required information but she said that the audit rules indicate that, unless a check is also presented at the audit, the charitable contribution will be disallowed. We are talking about over $45,000 in contributions for two years and as many as 50-60 individual donations. Her investment account does not return cancelled checks.
7. Facts: Client sold a property and purchased replacement property on the same day. All of the cash from sold property went into replacement property. The loan amount of new property is greater than that on sold property. The only problem, HE DID NOT USE A QUALIFIED INTERMEDIARY AND SETTLEMENT STMT OF SOLD PROPERTY SAYS CASH TO HIM AS SELLER AND LISTS HIM AS SELLER AND NOT AN INTERMEDIARY. I don’t this this qualifies as a 1031 but wanted your opinion.
8. In the 2018 Business Entity course you told us we needed to opt of the partnership audit regime program. You also told us even though we opted out we should appoint a Partner Representative. At the 2019 Business Entity course the speaker never mentioned the second part and I forgot to ask him. Is this still your recommendation for tax year 2019?
9. I have an estate filing a 1041 . not a final year. real estate loss on sale of property wipes out rental income . Should box 9a on k-1 still apportion depreciation when box 6-7-8 are all blank?
10. I just read the email newsletter about Health Care Options. Option 6 was about HRA limits of $1,800. How does this effect TASC HRA for sole shareholder/employee S Corporations? I have that setup in my S Corp to reimburse me with medical costs (not insurance). My plan has a limit of $10,000 established by me. This is taxed to me as salary in Box 1 only of the W2. I understand the newsletter just addressed new info for 1/1/2020, but am concerned if that meant the TASC HRA is out 12/31/19.