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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10096
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have an S Corporation. I want to give money to my mom from

Customer Question

I have an S Corporation. I want to give money to my mom from my corporate account, but I don't want to report it as a 1099 to her. I want to report that to myself. I receive a W2 from my business, can I get a 1099 for the money I will be giving my mom?
Submitted: 1 month ago.
Category: Tax
Expert:  Lane replied 1 month ago.

Hi. My name's Lane. can help you here.

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, a Master’s Degree, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986…

Please bear with me for a moment, while I prepare your response.

Expert:  Lane replied 1 month ago.

Gifts are not taxable events (not for income tax purposes anyway - UNLESS you were giving to a charity). Then there could be a charitable deduction.

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But gifts are specifically excluded (IRC §102) for income taxes for the giver.

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And as far as the S-Corp is concerned, any profits that have not been distributed, have already been taxed - either through the k-1 or your salary, which really isn't profit, it's an expense of the company and then you pay the tax.

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So if you have undistributed funds in the S-Corp, those have already been taxed (or you may be drawing from this year's profit,.that WILL be taxed) the gift itself isn't a taxable event.

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What the distribution DOES do is lower your basis in the S-corporation

Expert:  Lane replied 1 month ago.

You'll show the distribution on line 16 "items affecting basis" of the 1120-S' K-1. (which will have no affect on taxes - other than lowering your basis, which will increase any future capital gain on the sale of you company - and could make less of any future year loss deductible).

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(S-Corp shareholers can only take losses to the extent of their basis)

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But this isn't an expense that can be 1099'd. Its a transfer of assets without the expectation of anything in exchange.

Expert:  Lane replied 1 month ago.

Please let me know if you have any questions at all, before rating me.

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And if you DON'T have other questions Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …would be appreciated!

Otherwise I receive no compensation for the work.

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Thank you,

Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, a Master’s Degree, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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