Federal Tax

  • 1.  corp tax

    Posted 08-24-2015 11:06 AM

    I'm reviewing a 2014 C Corp return of a possible new client and see adjustments to shareholders' equity on schedule L line 26. The supporting schedule shows "shareholder distributions". Is there any justification for this treatment?

     

     

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    Daniel Levine
    CPA
    DANIEL LEVINE, CPA PC
    Scottsdale AZ
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  • 2.  RE: corp tax

    Platinum Most Valuable Member
    Posted 08-25-2015 07:24 AM

    Daniel, this is an interesting question and unfortunately one that can have many answers.  A simple one could be how they recorded dividends or possibly a return of capital to the owners.

    Without having more info, one really can't say what the justification is.  So, here are a few thoughts (that I'm sure you've already explored):

    1. contact the current CPA and ask what was going on
    2. speak with the client.  if you can't contact the CPA, maybe the client can ask them your questions

    you can feel free to reach out to me directly if you'd like.

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    Stephen Mankowski CPA
    EP CAINE & ASSOCIATES, CPA LLC
    Bryn Mawr PA
    610-525-2933 x204
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  • 3.  RE: corp tax

    Posted 08-25-2015 11:21 AM
      |   view attached

    Hi Stephen,

    Just for kicks, I've attached the relevant pages of the 2013 (first year) and 2014 corp returns. It ssems to me the preparer screwed up.  1099-DIV as not issued.

    I'd love your opinion if you have a few minutes.

    Thank,

    Dan



    ------------------------------
    Daniel Levine
    CPA
    DANIEL LEVINE, CPA PC
    Scottsdale AZ
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    Attachment(s)

    pdf
    201508250816.pdf   447 KB 1 version


  • 4.  RE: corp tax

    Platinum Most Valuable Member
    Posted 08-25-2015 05:44 PM

    Dan:

    As sometimes happens, the return is probably wrong.


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    Robert Brown
    ROBERT N. BROWN, CPA
    Jericho NY
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  • 5.  RE: corp tax

    Platinum Most Valuable Member
    Posted 08-27-2015 08:02 AM

    Dan, I have a few questions regarding these returns. 

    • I see that this is the initial return.  are they cash or accrual basis.  it appears to be cash, but wanted to check
    • do we know why they are a "C" corp?
    • was it the same preparer for both returns?
    • Appropriated retained earning?  is there a schedule?

    it appears to me that there are errors with these returns.  Feel free to reach out to me to discuss in further detail.

    ------------------------------
    Stephen Mankowski CPA
    EP CAINE & ASSOCIATES, CPA LLC
    Bryn Mawr PA
    610-525-2933 ext. 204
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Discussion Disclaimer

The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.