eveacct wrote:

- quote -

I misread, and assumed you were the S-corp owner (as opposed
to a preparer). I don't think there's a basis problem; by
"basis issue" I meant that you should remember to calculate
basis.

IME, home daycares often have a loss, particularly in the
first year, especially because of the generous home office
rules and the per diem allowance for meals provided. And
IME, do-it-yourself-ers are often oblivious to basis
limitations on losses. For a one-person company, it's not
usually an issue, but the per diem meals allowance (in
excess of what the company paid) could cause a loss in
excess of basis.

Unless the per diem is treated like percentage depletion,
which is a possibility (never had an S-corp daycare). But
my head is too full of other people's returns to even start
looking it up.

Phoebe

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Phoebe Roberts, EA" <phoebe[at]cottagesoft.com> wrote:
- quote -

Thanks all for the answer to the form 8829. However my
question is to Phoebe regarding basis problem.

What type of problem?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

I am not averse to calculating this after year end and
adjusting distributions or loans accordingly.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Thomas Healy wrote:
- quote -

Seems to me, Tom, that this issue should have been addressed
before 12/31, and reimbursement made on that basis.

ChEAr$,
Harlan Lunsford, EA n LA
Mon 7 mar 2005

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"eveacct" <eve_acct[at]ameritech.net> wrote:

- quote -

Use the form 8829 as a worksheet to figure out what the day
care deduction should be. Then have the corporation
reimburse the employee/shareholder for that amount. The
reimbursement will be non-taxable to the employee and give a
deduction to the S corporation.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

eveacct wrote:

- quote -

Use the 8829 as a worksheet. Enter the pro-rated amount of
each expense on the most-appropriate line of the 1120S.

IMHO, this isn't a good do-it-yourself situation, because
IME you may have basis issues.

Phoebe

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

The entity is an SCorp with one shareholder. The day care
center is licensed and operates out of the shareholder's
residence. The instructions for a day care indicate form
8829 should be used to determine indirect cost however form
8829 refers to Schedule C. The SCorp has to file form
1120S.

Any help out there?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->