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Can I claim deductions funds I used on behalf of my c corp…

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Can I claim deductions...

Can I claim deductions for personal funds I used on behalf of my c corp

Accountant's Assistant: Thanks. Can you give me any more details about your issue?

Well my business hold events, and makes most of the money from ticket sales at the event. However, upfront costs last year were $25k more than the business had on hand. I used my personal checking a credit card to cover these costs. Unfortunately, eventual sales were low so there wasn't money to get reimbursed. So can I post this as a persdonal loss?

Submitted: 2 years ago.Category: Tax
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Answered in 20 minutes by:
1/31/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,858
Experience: Taxes, Immigration, Labor Relations
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Taxes are paid on income that we receive.

When you PAY - that is not your income - that is your expense - and there is no tax liability for expenses.
However as that are expenses you personally pay for C-corporation - that amount is classified as your contribution to C-corporation and it is added to the basis you have in C-corporation shares.

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Tax Professional: Lev, Tax Advisor replied 2 years ago

Whether C-corporation may DEDUCT these expenses is a different issue - if these are qualified business expenses - they are deducted on form 1120.

But because these are expenses of C-corporation - you may not claim as your personal loss as long as you own shares of that corporation.

As you are an employee of C-corporation - C-corporation may reimburse you for these expenses - so you will receive the money tax free under an accountable reimbursement plan. And because they woudl be tax free for you - you woudl not need to deduct reimbursements.

But again - C-corporation is completely separate entity - and will need to deduct its own expenses.

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