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My Subchapter S corporation no longer has revenues (last 4…

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My Subchapter S corporation...

My Subchapter S corporation no longer has revenues (last 4 years)but it has accrued more than 125,000 of debts (loans from my personal monies that are already taxed). I have been told by my accountant that the company will now be considered a "hobby" and unless I gain a revenue stream, I cannot write it off against my personal loans to the company. Is there a benefit if I convert the Subchapter S to a C corporation?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

Beginning in 2018 I must pay my two personal assistance out of my personal income which is all derived from institutions who contract me but pay me as an employee and do not give 1099s

Submitted: 4 months ago.Category: Tax
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3/10/2018
Tax Professional: Stephen G., Sr Income Tax Expert replied 4 months ago
Stephen G.
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Customer reply replied 4 months ago
Thank you. The people I pay are contract employees. In the past 5 years the accounts have all switched me over from giving 1099s to giving me 1040s thus no more deductions in my Sub S Corp.
Tax Professional: Stephen G., Sr Income Tax Expert replied 4 months ago

You didn't mention the nature of your S-Corp's "Business", but if it is/was involved in something that could potentially be classified as a "Hobby", I would have to agree with your accountant.

As far as a "C" Corp is concerned, that would not be beneficial.

What is the nature of your business that you require assistants for if your customers are treating you as an employee?

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Tax Professional: Stephen G., Sr Income Tax Expert replied 4 months ago

The site charges extra for phone consultations, but it isn't necessary, They offer that option to everyone, but it is completely optional.

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