"San Diego CPA" <gcollect1[at]sbcglobal.net> wrote:
- quote -

The instructions for page 2 of Schedule E indicate a partner
can put UPE (unreimb partner exp) on the partner's return
under certain conditions. However, no such statement is made
for S Corp owners.

I don't know if you can take a home office for an S corp,
and, if you could, you would probably have to rent it to the
S Corp and report the rent income on Schedule E, page 1. It
would be a wash-out unless you had a 'rental loss.'

You cannot depreciate something you don't own, and your S
Corp does NOT own your house, you do. It would not be
handled the same as a Schedule C business owner would be
able to do it.

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"ak" <akak77[at]gmail.com> wrote:

- quote -

It sounds like you haven't actually started your business
yet but rather are in the startup mode. Therefore, you'll
capitalize all of the expenses listed above as part of your
startup costs and amortize over the appropriate term once
you begin your business. See IRS Publication 587 re
business use of your home.

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ak" <akak77[at]gmail.com> wrote:

- quote -

Remember, you and the corporation are separate legal
entities; i.e. you are not the corporation and the
corporation is not you. Thus, the corporation cannot have a
home office; it has no home.

You, as an employee of the corporation can be reimbursed for
the home office expenses - in addition to the salary the
corporation is paying you. Or, you can deduct those
expenses as unreimbursed employee expenses using Schedule A
of Form 1040. In such case, of course, the salary should be
large enough to cover those expenses.

It appears to me that you do not have a real grasp of the
corporate structure and the rules that apply to S
corporations in particular. I would strongly suggest that
you consult a tax accountant for the first year or two to be
sure you are getting thigns right.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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- quote -

This shouldn't be a problem since you state no sales or
profit. You may have to switch in the future if you meet
certain criteria.

- quote -

You may deduct the taxes in 2005 even though you are cash basis (I think
it's the recurring item exception),

- quote -

2005 DR Wages $4,000
2005 CR Payroll Tax Withheld $ 350
2005 CR Cash $3,650

- quote -

Yes. Even though you are on the cash basis, using a credit
card is deductible in the year of the charge.

- quote -

Yes. DR - Expense and CR - Credit card liability

- quote -

I'm not too knowledgeable in this area, so I won't comment.
I have a couple ideas on how to do it, but I'm not sure if
they are correct.

- quote -

Also, not sure about which pub, either.

One caution. You state that you have no sales or profit
yet. Have you started business? If you have not yet
started business, you may have to capitalize your expenses
as start-up costs. The start-up costs can then be deducted
(in full, or partially - depending on how much they are)
beginning in the year you start business.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Newsgroups: misc.taxes.moderated,us.taxes,misc.taxes

Hi,

I have a few doubts, and I hope someone can help:

I started an S corporation in CA in Aug 2005, and since
then I have operated this company out of my home. No sales
or profit yet, but I am working on that.

I wish to use the cash basis of accounting.


(1)
I paid someone $4000 in wages for 2005.
But the cheque I issued them was less because of payroll
taxes witheld. (~$350)

Since I paid the govt only in Jan 2006, this expense is
for 2006, correct ? (~$350)

How do I make the journal entries, and what dates do
I put on them?


(2)
A phone bill was due on Dec 15 2005.

It was paid using a company credit card on Dec 15 2005.

However, the credit card was paid only on Jan 15 2006.

Is this still an expense for 2005?

Ie, do I treat the credit as a loan from the credit card
company?


(3)
Since I use a home office for my S corporation, what
form do I file for the home office use? I saw a form that
said it needed to be filed with schd C, but I am filing
1120S instead.


(4)
What publication do I read for home office use by an
S corporation ?

In particular, does the company need to reimburse me
for electricity use or occasional telephone use?


Thanks!!!

AK in CA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >