G2R

I know this a very specific niche market, but I hoped there might be a few on here that have corporate clients in NYC.  Two opinion questions really.

1. Obviously being taxed as an S-Corp is usually more advantageous than LLC Single or C-Corp because of SS/Med and double taxation.  However, with NYC not recognizing the S-Corp status and charging the corporation tax on all NYC profits, that's nearly 9% due for those profits.   I was wondering if anyone had any experience with Single member LLC's actually being MORE tax advantageous than the S-Corp simply because of the NYC taxation of S-Corps.

2. S-Corp client (lawyer) has a few clients that have offices in NYC, however the lawyer never travels to NYC.  All his work is done from the office which is outside NYC.  Since he doesn't have nexus in NYC, is he still required to pay NYC corporate tax on the revenue earned from NYC clients?

Judy, that is EXTREMELY helpful information.  Thank you so much for taking the time to explain this.  

I'd rather be the discreet mouse than a trailblazer when it comes to tax returns.  While I can't find it specifically stated on the IRS website (I think they are still trying to interpret their own laws for 2018), it seems many of my financial advisory websites agree this unique scenario would be acceptable.

Thank you everyone for your valuable insights! 

I agree, HELOC loan secured by primary residence used to buy a second home would not be deductible under the new rules because it's personal usage, however, I think if the proceeds are used to buy a rental property, even though the HELOC is on the primary residence and not secured by the rental property purchased, then the rental property can deduct the interest of the HELOC loan on the schedule E.  

Correct?

Thanks Judy!  I agree, the SAFEST course seems to be capitalize the CC.  I think I might just go with this approach so I don't have to sweat an audit.  It's a weird situation given the natural disasters involved. 

However, I was under the impression that as long as the HELOC interest was used for rental property, then the interest would be deductible in 2018.  If it was used for personal, then it wouldn't.  

So here's a doosy.  

My client bought rental property in Puerto Rico in April 2017.  They were fixing it up, getting it ready to rent and boom, Hurricane Irma & Maria hit.  Minimal damage, but no power for months so obviously not rentable.  Here's my question.  The apartment was ready to rent in August and was going to be advertised for rent just before the hurricanes hit.  (I don't have proof of this but this is what my client told me.) Obviously, it was never rented and finally was rented for the first time April 2018.

• Should I take the rental expenses for 2017 on their 2017 return despite the fact that it was vacant the whole time?
• If I do file the Schedule E and claim the rental, the client used a HELOC from their personal residence to buy for the rental property.  Loan was taken out Nov 2016, and they finally closed on the property April 2017.  Think I can deduct the fully year of interest on the HELOC on schedule E or only the prior 30 days before the closing and each month there after? 

Hello, 

I've combed through the IRS publications on retirement plans and I can't seem to get a concrete answer. 

• My client is the sole employee in his Sub-S.
• He has a solo 401k through that business. 
• He has health insurance that he pays for though the business.  Those premiums paid are included in his W-2, box 1 wages.  

The EMPLOYER match contribution for the solo 401k contribution can be up to 25% of wages.  Are the eligible wages, salary wages only, or do they also include the health insurance premiums?

As an example:

• Wages are $50,000 for the year, Health Insurance Premiums are $10,000. 
• Box 1 on the W-2 shows $60,000.  Box 3 & 5 show $50,000. 

Is the company allowed to contribute $12,500 in ER contribution, or $15,000?  Or in other words, is it the Box 1 wages, or box 3/5?

Thanks!   

Quick Question -- When you only put the TOTALS for Boxes A, B, D, etc what are you using for the dates.  When I paper filed returns, I'd simply type VARIOUS, but ATX doesn't allow this.