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Posted by Harlan Lunsford on March 13, 2008, 5:23 pm
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tomchand@gwi.net wrote:
> S Corp with 2 unrelated taxpayers. Corp has been reimbursing milage on
> an accountable plan at the current fed mileage rate. One shareholder
> purchased a new car this year that was used 40% for business. Actual
> expenses are $2,000 over the milage rate, but taxpayer loses those
> because of the 2% floor on misc. deductions.
>
> Q: Can the corporation up the reimbursement to cover "actual"
> expenses, either by increasing the reimbursement rate to that
> stockholder or both stockholders, or by having the stockholder account
> to the corporation the "actual" expenses as total costs x business use
> while still keeping it as an accountable plan?
Yes, just as long as the plan is amended properly and adopted/passed by
the board of directors. But just be sure it's fair to both.
Now the stockholder with 2000$ more than covered under mileage rate,
does that include depreciation? And if so, is the car Listed property?
Is it a luxury car? These factors might have a bearing as to limited
deductions for him.
ChEAr$,
Harlan Lunsford, EA n LA
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