Giovetti & Giovetti, CPAs
Peggy Johnson CPA, P.C.
Custom Tax Service
New York, NY
In the end both choices we are discussing as options to avoid taxation of the assumption of debt by the s-corp boils down to booking the offset to shareholder distributions and/or shareholder wages.
Correct. My answer says child(ren) of the owner. I should have put a "(s)" on owner.
Peggy, I value your feedback and want to thank you for your thoughts. The shareholder would not be happy having to pay tax on the assumption of liabilities in excess of basis by the s-corp.
The credit card debt was carried on the books of the...