How does an owner loan on the business balance sheet work?
A genuine advance creates a business payable and an owner receivable. Principal funding is not customer income or a wage expense.
Tax Strategy Blog: Page 17
1236 articles for business owners and real estate investors. Page 17 of 35.
Business owner planning · Real estate planning · Cost segregation · Illustrated tax lessons · Article feed
How we review tax content · Return-review guides and checklist
Showing articles 577–612 of 1236.
How does an expense correction across business and personal returns work?
An expense adjustment can change entity income, owner allocations, basis and the household calculation.
How does an employer retirement plan contribution work?
The employer funds the retirement account under the plan rules, with deduction timing, limits and employee requirements reviewed separately.
How does an employee 401(k) payroll deferral work?
An eligible elected deferral is withheld from compensation and sent to the plan under applicable requirements.
How does an accountable plan reimbursement work?
The employee substantiates a qualifying business cost and returns excess advances; the company records the reimbursement under the applicable rules.
How does a transfer between two commonly owned LLCs work?
Tax treatment of transfers between commonly owned LLCs depends on federal classification. Disregarded entities can differ from separate taxpayers.
How does a tax safe harbor versus final liability work?
A safe harbor can protect against an underpayment penalty when its requirements are met. The final tax return still calculates actual liability from current facts.
How does a tax reserve followed by an owner payment work?
A business tax reserve is not a deduction. Classify the transfer to the owner correctly; the estimated payment reduces tax due, not operating profit.
How does a stock contribution before a distribution work?
A genuine capital contribution generally increases stock basis, while a later distribution must be evaluated under the applicable ordering and distribution rules.
How does a short-term rental loss on the household return work?
Classify the activity, evaluate participation and apply basis, at-risk, passive and other relevant limits.
How does a shareholder guarantee versus a direct loan work?
A guarantee commits the owner to possible repayment but generally does not itself create S corporation debt basis. A bona fide direct advance has different facts.
How does a SEP employer contribution work?
A SEP generally involves employer contributions under its eligibility and allocation rules; it is not the same mechanism as employee 401(k) salary deferrals.
How does a royalty between commonly owned companies work?
A royalty needs genuine intellectual-property rights, actual use, supportable pricing and consistent reporting. Legal ownership and development history matter.
How does a Roth 401(k) payroll deferral work?
A designated Roth deferral generally uses compensation included in current taxable income. Qualified withdrawal treatment differs from pretax money.
How does a retirement contribution correction with payroll work?
The correction depends on whether the problem is an excess deferral, annual addition, employer deduction or operational error.
How does a rental sale in a new payment projection work?
A sale can add gain and depreciation-related amounts to the household return. Mortgage payoff affects cash, not the same tax calculation.
How does a rental mortgage principal and interest split work?
Principal reduces debt, while qualifying interest can be a rental expense under applicable rules.
How does a rental improvement on the asset schedule work?
A capital improvement is generally added to an asset schedule rather than deducted as an ordinary repair. Identify its cost, classification and service date.
How does a real management fee between two entities work?
Management fees require actual services and a supportable arrangement. Review payer deduction or capitalization, related-party rules and recipient income.
How does a prior-year overpayment applied forward work?
A properly elected carryforward applies an overpayment toward the next year's tax, with credit timing determined under applicable rules.
How does a pretax employee salary deferral work?
Eligible pretax salary deferrals generally reduce current federal income-tax wages, while employment-tax treatment must be applied separately.
How does a partnership tax distribution work?
The partnership can distribute cash under its governing agreement to fund partners' tax obligations. Taxable allocations and distribution treatment remain separate.
How does a partner capital contribution work?
Cash or property contributed as capital funds the partnership and generally affects the contributing partner's outside basis.
How does a parent capital contribution to a subsidiary work?
Equity funding increases the investment and capital records; it is not a deductible fee for services merely because money leaves the parent account.
How does a loan schedule in the business return work?
Opening principal, advances, repayments, interest and ending balances should reconcile with the books and supporting agreements. Tax basis can differ from principal.
How does a loan between commonly owned entities work?
A bona fide loan creates a payable for one entity and a receivable for the other. Principal is generally a balance-sheet movement rather than a service expense.
How does a guaranteed payment to a partner work?
A qualifying guaranteed payment is determined without regard to partnership income. Its reporting and deduction or capitalization depend on the facts.
How does a corporate loan to a shareholder work?
A genuine corporate loan creates shareholder debt. Repayment intent, terms, interest and actual conduct must support the loan.
How does a cash balance plan funding obligation work?
A cash balance plan is a defined benefit plan with actuarial calculations and ongoing funding requirements.
How does a C corporation loss at the company level work?
A C corporation operating loss generally stays with the corporation rather than passing through as the shareholder's personal deduction.
How does a C corporation dividend and its second tax layer work?
A dividend generally comes from after-tax corporate earnings and is not a corporate deduction. Shareholder dividend tax rules can add a second tax layer.
How does a C corporation capital contribution work?
A shareholder investment is generally capital funding, not customer income. It belongs in the ownership and basis records rather than the sales ledger.
How does a C corporation business reserve work?
Corporate cash should be considered in light of actual business needs and applicable accumulation rules.
How does a bonus payment through payroll work?
A cash bonus generally has withholding and payroll tax treatment. Supplemental-wage withholding need not equal the employee's final income-tax rate.
Can Excess Business Losses Offset W-2 Income?
See why W-2 wages do not increase the Section 461(l) allowance and how a large business loss can leave a high-income employee with taxable income.
Excess Business Loss Limits for Short-Term Rental Owners
Learn why a nonpassive short-term rental loss can still be limited by Section 461(l), with a 2026 example and a rental-record checklist.