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Hi, I am a moderator for this topic. I sent your requested Professional, CGCPA a message to follow up with you here, when they are back online. If I can help further, please let me know. Thank you for your continued patience.Lindie
Yes, I would like to wait for an answer. Perhaps during the week, CGCPA will have time to answer.
Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.
I see a few minor points in your work up:
The net income will be ($1.2M less equipment of $200k, less salary of $1M less payroll taxes ) If we assume for sake of simplicity that the payroll taxes and payroll will combine to $1M) then the net taxable income will be zero. The tax credit for R&D expenditures will be as you calculated but will carry through to the following year. To make them usable in the current year there would need to be a net income.
If you alter the amounts to achieve this then your analysis appears correct. The tax credits for R&D will pass through to the shareholder via Schedule K-1.
Is this true as long as there is ANY net income? Can I alter the amounts to make the net income $1? Would the rest of my analysis be correct then?
Thanks for your help!
Yes to all of the items.