We gave a manager a vesting profits interest. Is that the same as giving company stock?
A partnership profits interest is not corporate stock, and vesting does not by itself determine taxability.
Tax Strategy Blog: Page 6
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One partner took extra draws. Can we deduct the difference as pay?
An unauthorized or unequal withdrawal needs legal and accounting review before assigning tax treatment.
A partner died during the year. Can we allocate the full year's profit using the old percentages?
A partner's death generally closes the partnership tax year with respect to that partner, while the partnership itself may continue.
Can we distribute the partnership's last cash while one vendor debt is unresolved?
Final Partnership Distribution With Debt Outstanding. A specific owner scenario, the facts that change the answer, and the records needed for a tax review.
We have fewer than 100 partners, but one is a disregarded LLC. Can we elect out of centralized partnership audits?
Having fewer than 100 partners does not by itself establish eligibility to elect out of the centralized partnership audit regime.
Our partners live in different states. How should we set tax distributions?
Start with the operating agreement and distinguish a contractual distribution formula from each partner's actual tax bill.
Can a partner use distributions instead of earned income to calculate a self-employed retirement contribution?
A partnership distribution is not the measure of a working partner's retirement-plan compensation.
Should my new partner pay the buy-in to me or to the company?
New Partner Buy-In: Pay the Owner or the Company?. Review the facts, records and next steps for your business.
My partner is leaving with a negative capital account. What happens?
Negative tax capital is a signal for analysis, not a complete gain calculation.
Our partnership pays a partner's health premiums. Do we report them like ordinary employee benefits?
Partners generally are not employees of the partnership for federal employment-tax purposes.
Our partnership owes a partner a fixed payment but has not paid it. When do both sides report it?
An unpaid guaranteed payment needs coordinated timing analysis under the partnership rules, accounting methods and any applicable related-party provisions.
My business partner is leaving. What happens to our cash balance plan?
The partner's departure can affect plan benefits, funding and business cash, but those consequences depend on the plan and transaction.
My new partner contributes a client list instead of cash. How is that handled?
Distinguish a contribution of property from compensation for services and identify the entity's tax classification.
A new partner received current equity value for services. Is that tax-free like a profits interest?
A partnership capital interest received for services can create taxable compensation based on its value, subject to the applicable vesting and Section 83 rules.
I sold the assets but kept receivables. Why do I still have business income?
The sale does not automatically change the treatment of receivables retained by the seller.
I travel continuously for my business and have no fixed home base. Can I deduct every hotel night?
A continuously traveling owner may be an itinerant without a tax home.
Can I transfer my personal credit-card balance to the company?
Can a Company Pay Your Personal Credit Card?. Review the facts, records and next steps for your business.
Can I put my business into a trust without affecting its tax status?
Trust terms, entity eligibility and transfer restrictions must be reviewed together.
I work regularly at two business locations in different cities. Which city is my tax home?
When a person regularly works in more than one location, the tax home generally follows the main place of business under the relevant facts.
Can I put my spouse on payroll if they only help occasionally?
Employment should reflect real services, credible pay and proper reporting.
My spouse and I each have outside 401(k)s. What can our business add?
Review each person's deferrals across plans and the business's employer contribution rules.
I sold one company but kept the shared employees. How should costs change?
Shared Employee Costs After Selling One Company. Review the facts, records and next steps for your business.
Should I terminate our retirement plan before selling the business?
Coordinate the plan decision with the transaction structure and buyer's requirements.
I sold half my business. Should my salary fall by half too?
Owner Salary After Selling Half the Business. Review the facts, records and next steps for your business.
Will a late owner bonus increase our retirement contribution?
It may affect compensation used in the calculation, but the plan definition, payroll timing and employee consequences must be checked.
Can I prepay three years of software to lower this year's profit?
Payment timing alone does not establish an immediate deduction for a multi-year benefit.
My personal tax refund hit the company account. Is it business income?
Personal Tax Refund Deposited Into the Business. A specific owner scenario, the facts that change the answer, and the records needed for a tax review.
My company pays my mortgage instead of a paycheck. How should we fix it?
Start by identifying the recipient, purpose and reporting of every payment.
Can my company pay an employee's student loan instead of a bonus?
A qualifying written educational-assistance program can support an exclusion for eligible student-loan payments within the applicable limit.
My S corp is profitable but cannot fund year-end payroll. What now?
Profitable S Corp, No Cash for Year-End Payroll. Review the facts, records and next steps for your business.
One of my K-1s is late. How do I estimate taxes?
Use a supported estimate from the entity and document its uncertainty.
Can my personal holding LLC own shares in my operating S corp?
Review the holding company's federal tax classification and ownership.
I lost the receipt but have the bank charge. Can I still deduct it?
A payment record is a starting point, not complete proof of every deduction.
I lent to Company A, but Company B repaid me. Is that a problem?
One S Corp Repays Another Company's Owner Loan. Review the facts, records and next steps for your business.
My company cannot repay my loan. Can I claim a bad debt?
A disappointing investment does not automatically become a deductible business bad debt.
I worked remotely during vacation. Does that make the hotel deductible?
Ordinary remote work during a personal vacation generally does not turn the hotel into deductible business travel.