433-A income section

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  • #43428
    Liz Castro
    Participant

    Hello,
    I have a TP with wages and net loss from his S Corp’s profit and loss statement (433-b). Can I reflect the loss of the business on the distribution income section of the 433-A? Or am I suppose to put a zero for distributions on the 433-A? He is restaurant and does not expect his business to survive after COVID.

    #43429
    Eric Green
    Keymaster

    Liz I would include the loss. The IRS will argue to zero it but the reality is he is taking wages that there is no income to support, so he is effectively borrowing that money and the two need to be offset. That would be my argument.

    #43649
    Liz Castro
    Participant

    Thank you Eric

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