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S Corp basis in aggregate

  • 1.  S Corp basis in aggregate

    Posted 19 days ago
    Hello

    (2) S Corps both have the same shareholder who owns 100% of both companies.
    One company has plenty of basis the other one does not but shows a loss
    this year.
    Basis in aggregate is more then enough to cover loss.

    Any opinion on the best way to present this? Has anybody been challenge
    on audit?

    Thanks

    --
    Perry Paletta CPA
    845.620.1606
    http://www.paletta.net


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  • 2.  RE: S Corp basis in aggregate

    Posted 19 days ago

    Each corp stands on its own as far as basis.

     

    You probably considered all these , but I hoped chiming in might help...

     

    Did they perform transactions between each of the two corp that may have not been considered ? that MIGHT give rise to swing income from one to the other. ?

    A Sub "S" subsidiary could be a possibility

    Loan money to the corp for future basis.

     

     

    Just a thought

     

     

    Abby Alhante,  CPA

     

    Kurcias  & Alhante, LLC  CPAs

    525 Broadhollow Road   Suite 104

    Melville NY  11747

    516.829-5890  Fax 516-829-3976

    Mobile 516-381-9301

    AbbyA@KurciasAlhanteCPAs.com

    ( E mail response preferred )

     

     

     






  • 3.  RE: S Corp basis in aggregate

    Posted 18 days ago
    Thanks.?? Apparently there is a case "Culnen" that addresses this issue.
    In this particular case the court allowed inter-company loans to be
    treated as basis.



    --
    Perry Paletta CPA
    845.620.1606
    http://www.paletta.net


    This communication and any accompanying documents are confidential and
    privileged. They are intended for the sole use of the addressee. If you receive
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    or other privileges as to this communication or otherwise. If you have received this
    communication in error, please contact me at the above email address. Thank you

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  • 4.  RE: S Corp basis in aggregate

    Posted 18 days ago
    You need to be very careful.  Intercompany loans do not create basis. Culnen is an outlier and has unusual facts.  A back to back loan is much safer.  The loan must be "Bona Fide"​ and properly documented. Look at Reg. 1.1366-2 and the Maguire case TCM 2012-160. There are also At Risk considerations that differ from the basis rules.

    It is also possible to create a QSUB holding company as Abby mentioned.

    ------------------------------
    Robert Barnett
    CPA, ESQ.
    Capell Barnett Matalon & Schoenfeld LLP
    JERICHO NY
    ------------------------------



  • 5.  RE: S Corp basis in aggregate

    Posted 18 days ago
    I have a unique situation...where payroll was drawn by payroll processor
    from one company but reported under the ID number of another...

    --
    Perry Paletta CPA
    845.620.1606
    http://www.paletta.net


    This communication and any accompanying documents are confidential and
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    or other privileges as to this communication or otherwise. If you have received this
    communication in error, please contact me at the above email address. Thank you

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