After winding down his previous business, my client has continued to lend out more and more of his own money to private investors who are flipping and renting out homes. He's deriving over $ 200,000 of interest income from it now.
We've been reporting this interest income on his Sch B, but it appears that this is becoming a real business, as he is incurring expenses for a part time bookkeeper, computer software, drive-by appraisal fees, marketing expenses, office expenses, etc., etc.
Do you see any problem with moving his Sch B Interest Income into an S Corporation as Gross Receipts, and deducting all related expenses? He would like to take a salary and make retirement contributions.
Abby Alhante, CPA
Kurcias & Alhante, LLC CPAs
525 Broadhollow Road Suite 104
Melville NY 11747
516.829-5890 Fax 516-829-3976
( E mail response preferred )