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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12044
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I'm filing Form 7004 S-Corp to receive an automatic 6

Customer Question

I'm filing Form 7004 for my S-Corp to receive an automatic 6 month extension. I'm 100% shareholder. Since the business income is passive, should I put $0 on lines 6, 7, and 8 or do I need to estimate what I (the shareholder) will owe?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi - I can help here

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I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

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Although I would say that a little differently, the answer is yes. Lines 6, 7, and 8 are zero ... not because the income is passive (could be passive if it's rental income, could also be active depending on what you do), but because the S-Corp itself doesn't pay taxes.

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As the shareholder employee, you pay the taxes do (salary on the S-Corp w-2 you give yourself and distributive share of profits that will flow through the K-1 for profit above that salary and other expenses).

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It would only be in the case of an entity that pays income tax, such as a C-Corp or an irrevocable trust using the 7004 that a tax would be due here.

Expert:  Lane replied 1 year ago.

I hope this has helped.

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

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane