S-Corp. out of pocket expenses

[Gretel]

Brad will like this one.

I have a S-Corp., which just rents out a building. Bad advise from lawyer, but it is the way it is. So no employees since no business. 6 bookkeeping entries a year.

If they adopt corporate resolution to require shareholders to pay some out of pocket expenses can they be deducted on pg.2 of sch.E? Or are they still subject to 2% of AGI on sch.A?

[dsi]

I don't have a cite, but I believe they are deducted on Sch A, 2%.

[Bees Knees]

The ability to deduct unreimbursed expenses on page 2 of the Schedule E only applies to partners in a partnership. It does not apply to shareholders of an S corporation. Schedule A subject to 2% AGI is your only option other than to have the S corp reimburse the expenses under an accountable plan.

[ChEAr$]

And even then.....

The ability to deduct unreimbursed expenses on page 2 of the Schedule E only applies to partners in a partnership. It does not apply to shareholders of an S corporation. Schedule A subject to 2% AGI is your only option other than to have the S corp reimburse the expenses under an accountable plan.

schedule a deductions are only for employees, and not for stockholders.

[Joe Btfsplk]

schedule a deductions are only for employees, and not for stockholders.

Stockholders who have such expenses should also be an employee, and could deduct it on Schedule A. If they get no salary, then there is no legal way to deduct the expense on Form 1040, but some creative accountants could probably find a way.