Aug 21, 2013
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I'm new here so hello everyone. I know this is wordy but I really need your help.

My question or dilemma is this:

I have a s corporation. My husband and I are both partners with 3 other people, making it a company with 5 partners in total. In 2010, we started the company with each partner contributing $50,000 making a total start up fund of $250,000. When we did our taxes in 2011 for 2010 our accountant told us that he was going to divide the losses into a 5 year loss for all the contributions and business expenses. In 2011 we didn't have enough funds to pay bills so we each made an additional contribution of $10,000. We didn't include this contribution into our k-1 until 2012 taxes. With all the income we made and deducting all expenses we pretty much broke even but still received a k-1 for about $20,000 per shareholder for 2010 and 2011 but 2012 with the added $10,000 per shareholder which made our k-1 $30,000+.

Now with that said, my husband and I made about around $78,000, with the k-1 for the both of us we were left with a net gross of $11,000. This sound great because I got back a lot of tax refund but I'm in the process of buying a coop. It will be a cash deal so I don't have a loan but the board doesn't understand the k-1 and thinks I make only $11,000 combined income. How can I explain to them in writing that the losses were for 2010 and 2011 and since 2012 till present the company is actually making money and the losses are spread out for 5 years for money that I took out 2-3 years ago and that I really do make $78,000 last year and I didn't take $67,000 out of my bank?


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