How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Richard Your Own Question
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55289
Experience:  29 years of experience as a tax, real estate, and business attorney.
Type Your Tax Question Here...
Richard is online now
A new question is answered every 9 seconds

11.30.2010 My wife and I are in our senior years and have

Customer Question


My wife and I are in our senior years and have owned a small private S corporation for many years. Our firm has been running losses since last few years; and our CPA has filed our 1020 Tax Returns showing losses. Our daughter used to work for the company and has been one of the company's directors since many years. During the earlier years she worked with us, she was gifted 10% of the company’s shares. She got another unrelated job in a large company several years ago but still maintained her directorship of the company and helped on needed basis. This year, at our request, our daughter has contributed money out of her own pocket and assisted the company payoff part of the company’s bank loan interests expenses. She agrees to continue contributing a portion of her earnings to help the company’s cash flow. The question is: Is she allowed tax credit from her annual incomes on the fund she contributed to the company since she holds 10% shares of the company? The company accountant entred her fund injection in the books and we also under board minutes.

Please advise. Thank you.
Burlingame, CA
Submitted: 6 years ago.
Category: Tax
Expert:  Richard replied 6 years ago.

Good morning. Because your company is an S Corporation, the income, loss and credit items flow through to the owners based on each owner's ownership interest in the company. With her additional investment, perhaps she is entitled to a larger ownership interest which would allow her a larger percentage of the allocated items. But, other than an allocation based on her ownership interest, she is not allowed a preferential allocation of any tax items.



I hope this has given you the guidance you were seeking. I wish you the best of luck!


If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.


If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.


The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.