USA S Corp State Income Tax


Joined
May 25, 2021
Messages
5
Reaction score
0
Country
United States
For a pass through entity that receives a late penalty from the state department of revenue (its state of operation) should the penalty be debited to an expense account or added as a stockholders distribution.

Thanks!
 
Ad

Advertisements

Joined
Dec 19, 2020
Messages
92
Reaction score
12
Country
United States
Neither.
It's a nondeductible expense that is a reduction of the AAA.
 
Joined
May 25, 2021
Messages
5
Reaction score
0
Country
United States
Neither.
It's a nondeductible expense that is a reduction of the AAA.
Isnt the AAA similar to the retained earnings account? Why cant it just be processed as an expense to the owner of the company and circumvent our expense accounts altogether and we just show a cash outflow through the distributions account?
 
Joined
Dec 19, 2020
Messages
92
Reaction score
12
Country
United States
Because a distribution effects the shareholder's basis, whereas nondeductible expenses charged to AAA don't.
 
Ad

Advertisements


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top