unreimbursed LLC expenses

[sd2053]

The TP is sole owner of a LLC taxed as a S-Corp. He uses his personal auto for business mileage. He did not take a salary and is taking all profits on a K1. Is there a way he can deduct the mileage?

[BHoffman]

The TP is sole owner of a LLC taxed as a S-Corp. He uses his personal auto for business mileage. He did not take a salary and is taking all profits on a K1. Is there a way he can deduct the mileage?

An accountable plan is probably the best way. He could submit his mileage log to his LLC/SCorp and it can reimburse him with a check.

Otherwise, he might be stuck reporting it on form 2106 subject to the 2%.

You can't take UPE like in a partnership.

[sd2053]

thanks...the 2106 will work

[Gretel]

Wait. Form 2106 is for employees. If he isn't on payroll - which he should - how can he have employee business expenses?

[Gretel]

The TP is sole owner of a LLC taxed as a S-Corp. He uses his personal auto for business mileage. He did not take a salary and is taking all profits on a K1. Is there a way he can deduct the mileage?

Yes, the LLC corporation can reimburse his mileage under an accountable plan. I believe this, too, requires an employer-employee relationsship. I am not sure, though.

[veritas]

The owner/shareholder

is a statutory employee. If he performed services and there were profits he should have been on the payroll

[erchess]

Mmmmmmmmmm

Veritas, the term "Statutory Employee" has a very specific meaning. All of the people I have met who fell under that category sold insurance. And since I know you know that, I have to ask whether you mean what you said (in which case I will bow to your greater knowledge of such things) or whether you meant that an LLC Owner who works in the business is an employee by statute?

[veritas]

Caught me

Veritas, the term "Statutory Employee" has a very specific meaning. All of the people I have met who fell under that category sold insurance. And since I know you know that, I have to ask whether you mean what you said (in which case I will bow to your greater knowledge of such things) or whether you meant that an LLC Owner who works in the business is an employee by statute?

By statute the shareholder of an S Corp who performs services is an employee.