New corporation

[DaveinTexas]

I have a new client who formed an S Corp in 2007; operating as a real estate sales business.

The corporation does not have a broker's license so the company she contracts with will only pay her, 1099 in her social security number and checks in her name, the commissions directly.

Is there any way for my client to run all of the deposits through the corporation as if the corporation was the real estate agent even though all income is reported to her?

Should she setup an agreement with the corporation to make this arrangement possible?

TIA.

[BHoffman]

Nominee Distribution

Here's what I do:

Report the 1099 info on her Sch C. Back that amount out under "Other Expenses". The description would be "Nominee Distrib EIN XX-XXXXXXXX".

If you research "Nominee Distribution" you'll see what I mean in more detail.

[DaveinTexas]

While I know that this is a viable option

Here's what I do:

Report the 1099 info on her Sch C. Back that amount out under "Other Expenses". The description would be "Nominee Distrib EIN XX-XXXXXXXX".

If you research "Nominee Distribution" you'll see what I mean in more detail.

My question remains, is this proper?

I know that income earned by the corporation that is reported to the taxpayer is nominee income; zeros out the schedule c. This is a taxpayer who is a real estate agent, with a license, performing nonemployee compensation services for a third party. The third party is paying the agent directly because the corporation does not have a license.

Is it still proper to report the income on the corporate return?

TIA.

[BHoffman]

Reporting requirements

I don't know the legal ramifications of this scenario, and they may vary from state to state.

Seems to me that the income is actually being reported on the Sch C, and income recognized by the Scorp could originate from the Sch C and not from the issuer of the 1099.

I see your dilemma and would like to see what others say. In the meantime, I'll poke around and do a little research on this as time allows.

[BOB W]

Check with your state licensing bureau. NY, for a long time, restricted non brokers (salesman) from operating as an entity. About 4 years ago they changed allowing a salesperson to be paid to as a corporation.

[veritas]

Assignment of income

Sounds like a problem to me.

Early in my career this was pounded into my head, "The fruit belongs to the tree that produced it".