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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12541
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
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I recently sold a C corp that I owned, along with other family

Resolved Question:

I recently sold a C corp that I owned, along with other family members through an LLC. I was president. In order to settle several back and forth tort claims I agreed to personally make a settlement payer to the buyer. Can I deduct that payment on Schedule E?
Submitted: 10 months ago.
Category: Finance
Expert:  Megan C replied 10 months ago.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com

MyVirtualCPA :

How are you today?

MyVirtualCPA :

Typically, this type of agreement would be seen as a contribution to the corporation from the owner, or if you documented it as a loan it would be a shareholder loan

MyVirtualCPA :

You, unfortunately, cannot deduct the payments made personally because they weren't made through the business.

Customer:

You don't even think it's deductible on Schedule A as a Miscellaneous Itemized Deduction?

MyVirtualCPA :

You can deduct employee business expenses as a schedule a deduction

MyVirtualCPA :

but if you were an owner you weren't really an employee

Customer:

Since when can't the owner of a C corp also be an employee?

MyVirtualCPA :

Were you an employee? Did you get paid on a W-2?

Customer:

well no, there was no W-2.

MyVirtualCPA :

Then you were not an employee.

MyVirtualCPA :

Sometimes, owners are paid a salary on W-2

MyVirtualCPA :

Is there anything else I can assist you with today?

Customer:

Not the answer I was hoping for. Thanks.

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12541
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and 4 other Finance Specialists are ready to help you
Expert:  Megan C replied 10 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

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Expert:  Megan C replied 10 months ago.
Thanks for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

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