In article <0e3d9776-dbc2-465e-ac61-2aac66481a9e[at]w39g2000prb.googlegroups.com> ,
removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:

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Since nobody else has, I'll try.

The general issue is that personal income can't just be handed over to
a corporation (even, or especially, Sub S) in order to make corporate
expenses deductible (that wouldn't be if the corporation didn't have
income).

On the other hand, various securities regulations require that certain
activities be undertaken only by natural persons (humans) and not
legal persons (partnerships, corporations, etc.)

Seth

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<ChenangoBusinessServices[at]hotmail.com> wrote in message
news:d70d66e0-b66c-4099-ab84-b89f670a23f8[at]b1g2000hsg.googlegroups.com...
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as an expense paid to the S Corp. He could even issue a 1099 to the S Corp,
but I don't think they have changed the rules to make that necessary.

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On Sep 14, 8:19 am, Harlan Lunsford <hlunsf...[at]bellsouth.net> wrote:

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Sorry, I don't see the subterfuge/problem even in a California hour.
Can you explain?

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<ChenangoBusinessServices[at]hotmail.com> wrote
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Exactly like that? No.

But I have seen 1099's issued to one or more owners long after they for the
corporation, mostly for reasons of laziness on the part of the owners and/or
the issuer of the 1099. I see it often in the medical and insurance fields.
Some insurance companies are hell bent on making payment directly to the
service provider - in that doctor's name - instead of the medical practice
name if incorporated. similarly for insurance agents getting commissions -
even though the policy was sold be the agent corporation.

It's most likely proper to show the receipt on Schedule C, then issue a 1099
to the "S" corp, partnership, etc if that is indeed where the money went.

Someone needs to look into the legal aspects of what he is doing, if as you
say "he can't be a corporation and do trades as a corporation", there may be
some legal aspect that needs to be addressed.





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Paul A. Thomas, CPA
Athens, Georgia

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ChenangoBusinessServices[at]hotmail.com <ChenangoBusinessServices[at]hotmail.com> wrote:

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Start by telling your prospective client how fortunate
he is to have come to you before the IRS decided to
audit him.

The trading problem is commom for brokers. I have
no idea as to the proper way to have structured the
business. BUT I am certain that he has to be peronally
on the hook to the exchange and other brokers for losses.
You need to research how other brokers handle this.

As it sits right now, the Schedule C income that does
not pay the expenses of the S-Corp is his ordinary
income. That includes the S-Corp dividend

Another problem is that the owner of an S-Corp is NOT
an employee of the S-Corp for payroll purposes and that
needs to be corrected too.

Dick

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ChenangoBusinessServices[at]hotmail.com wrote:
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IRS would see thru this subterfuge in a Noo Yawk minute. I would like
to bet that the previous accountant was not a CPA.

ChEAr$,
Harlan Lunsford, EA n LA

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My prospective client is a registered Investment adviser. His stock
brokers license is in his name. He can't be a corporation and do
trades as a corporation I am told. So there is a 1099 for the gross
commissions as an individual. He has an office and two employees. The
prior accountant reported the 1099 on schedule C then took all the
revenue to the S corp as income, and no profit on schedule C. Within
the S corp the expenses and payroll is paid to the employees and the
president. The small net income comes back to the 1040 as Sud S
dividend.

Does anyone have experience with this approach??

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >