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Corporation A closes . Balance sheet shows a loan from stockholder

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to corporation, this is not...
Corporation A closes . Balance sheet shows a loan from stockholder to corporation, this is not on tax return. New corp is opened, new accountant comes in files next tax return with a shareholder loan from stockholder. Owner signed without reading it all the through. No promissory note is signed, no corp minutes. Why would accountant do this? Is there any plausible reason?
Submitted: 2 years ago.Category: Tax
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Answered in 37 minutes by:
7/18/2015
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 2 years ago
PDtax
PDtax, Certified Public Accountant (CPA)
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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 2 years ago
The best answer is what to do to record draws from the business or deposits by the owner. There are two reasons that come to mind: Balance sheet doesn't balance. Due to/ due from owner is the common plug if needed.If expenses exceed income, let's say from officer expenses paid from the checking account, either the extra cash is asked or loans from officer. Here's how the math works:100,000 in deposits, $70,000 in expenses, $30,000 draws or officer expenses. Business owner thinks he broke even. He really made $30,000 and didn't pay in any taxes. New accountant reports $70,000 is sales, $70,000 in expenses. $30,000 draws match the loan created by accountant. Income understated by $30,000.
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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 2 years ago
Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer
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