USA Sub S: Accounting for owner medical bills?


Joined
Jan 23, 2023
Messages
2
Reaction score
0
Country
United States
I have recently received a check request from the management team of an LLC/Sub S. I've been asked to reimburse one of the three shareholders (who is also the president) for some medical expenses that he paid out of his pocket.

I'm neither a CPA nor a lawyer, and I don't play either on TV, but it seems like I've heard that the IRS would take a dim view of such a transaction being recorded as an expense if no similar reimbursements are available to employees -- and they aren't.

What's the appropriate way to record this? I'm thinking as a dividend, with pro rata dividends being declared for the other two owners. Any advice would be apprecaited.
 
Ad

Advertisements

Joined
Jan 23, 2023
Messages
2
Reaction score
0
Country
United States
I guess I will go with my gut, treat it as a dividend, and figure out what the other two shareholders should receive.
 
Ad

Advertisements

Joined
Feb 2, 2023
Messages
1
Reaction score
0
Country
United States
I am a CPA, and I believe it should just be included in their wages, just as health insurance or any >2% sh benefit.
 

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