Welcome Guest. Register Now!  


For 2016 Tax Tips For Year 2016.


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 07-05-2017, 03:21 AM
Junior Member
 
Join Date: Mar 2015
Posts: 4
Auto Expense Reimbursement by S-Corp

Hi. I need some help here. I have a client who has filed a Schedule C and has been taking actual expenses on his vehicle. He has now formed an S-Corp with another shareholder, and the S-Corp adopted an accountable plan which reimburses shareholders for business use of their vehicle using the IRS standard mileage rate. Is this something that is going to cause a problem? I know you cannot use the standard mileage rate if you:
  • Claimed a depreciation deduction for the car using any method other than straight line, for example, MACRS,
  • Claimed a Section 179 deduction on the car,
  • Claimed the special depreciation allowance on the car,
  • Claimed actual car expenses after 1997 for a car you leased,


Obviously, its not the same taxpayer who claimed actual expenses but is now claiming the SMR. But can he be reimbursed this way by the S-Corp?

It may be relevant to note that the S-Corp was formed mid-year, and the Schedule C that will be filed to account for the shareholder's business activities prior to the creation of the S-Corp will necessarily include his vehicle expenses for the period prior to the S-Corp. He also took bonus depreciation on this auto.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Is a reimbursement for goods purchased by an individual considered an expense reimbursement eligible for box 7 on Form 1099? jeannine9 Miscellaneous 3 02-06-2017 10:08 PM
Auto Expense question [email protected] Auto Expenses 1 10-20-2010 08:41 PM
Auto Self Employed Business Expense coordinator Auto Expenses 1 06-18-2008 12:01 PM
Auto Lease Expense teleminder Auto Expenses 0 05-19-2008 04:10 PM
Treatment of Auto lease expense on Corporate tax return? Sabby Auto Expenses 1 01-26-2007 11:45 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning