I have a couple of tax
Married couple who is going thru a divorce. A settlement has been agreed upon. Part of the divorce settlement is stated as follows:
"Husband owns a C-Corporation in Alaska. In exchange for any interest wife may have in the business, husband agrees to pay her $375,000. Payment to the wife, shall be made within 5 days of date of divorce. Payment may be made directly to wife's attorneys trust account to be distributed to wife. After payment is made, wife shall have no interest in the C-corporation nor be responsible for any debts of the C-corporation"
The question is:
Can the $375,000 be paid out of the C-corporation and taken as a expense of the corporation? And if yes, should it be taken as a payroll to the wife or a direct expense?
Here is the situation:
The husband is the sole stock holder in a C-corporation. He has been involved in the corporation since it began in 1980. The couple was married in 2003. In 2006, the wife became an officer(secretary/treasurer) of the C-corporation, but owns no shares of the corporation. The wife did not work at the business, but had her own employment. In September 2010, the husband was in a serious car accident. At this time the wife had to become involved in the business of the C-corporation. She was put on the payroll as a manager at that time, wages paid to the wife were that of or higher than employees in a similar business. She was still an officer of the C-Corporation but owned no shares. She continued to work in the business and be paid until the couple separated in October 2012.
I have a C-corporation that has Appropriated Retained Earning of $2,800,000 to day trading activity. The main business of the C-corporation is a Restaurant/Bar. The balance of the day trading stock account on the balance sheet is approximately $2,000,000. How do I go about separating the day trading business into a separate corporation from the Restaurant/Bar business? And what would be the tax consequences of doing so?