We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I used Gary’s services to file my 2012 income tax return. This was my first year having an accountant do my return, as I have always done it myself using TurboTax. However, this year I had cancelled debt from my old primary residence which I was forced to convert to a rental property after relocating out of state.

While it didn’t cost me anything to do the short sale, the income tax consequence from the cancelled debt, roughly $50,000 in my case, was enough to move me from the 15% tax bracket to the 25% tax bracket.  Needless to say, I was concerned about that.

Finances were already tight and my husband and I are expecting our first child this fall. So the possibility of owing income tax was stressing me out. However, Gary was great at relieving my fears.

He is extremely knowledgeable, answered all my questions and was very thorough. I knew I was in good hands. He kept in constant contact with me throughout the process, keeping me updated on the progress of my return and letting me know what paperwork he needed to complete my filing.

In my mind, best case scenario would have been to not owe any taxes. Second best would be to only owe a little. Well, you can imagine my surprise and delight when Gary told me I was actually due a refund of a little over $2,700.00!

To top it all off, I found Gary’s fee for service to be fair, competitive and affordable; especially given the complexity of this type of return. I am so glad I did not try and go it alone this year. I am extremely pleased with Gary’s service and would recommend him highly to anyone, in fact I already have. If you have cancelled debt from a short sale or foreclosure, don’t freak out. Take a deep breath and call or email Gary. I am grateful I did.

Angie Falke of Holiday, FL

Free Consult

Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Form 1120-S CPA discusses S Corporation Loans to and from Shareholders | Form 1120-S, U.S. Income Tax Return for an S Corporation

Form 1120-S CPA. S Corporation CPA. U.S. Income Tax Return for an S Corporation.

I run our CPA firm as an S Corporation. So you know I stay current on S Corporation issues. For a free consult call (910) 399-2705. We can provide service regardless of where the S Corporation is registered or where the Shareholders live.

When Form 1120-S CPAs see problems with S Corporation accounting it usually involves the Balance Sheet. Which is understandable. Most S Corporations are small enough that the managing shareholder can track financial transactions by memory. And without some training, the Balance Sheet isn’t as useful for managerial purposes as the Income Statement. But brilliant minds have crafted managerial tools using components of the Financial Statements. I’ve always thought it’s a shame S Corporations lose out on that opportunity.

The IRS takes an interest in loans between the S Corporation and Shareholders

“I think the IRS worries about the S Corporation loaning money to shareholders that never gets paid back and thus escapes taxation. But in my experience as a Form 1120-S CPA, the Shareholders more often lend money to the S Corporation and never get it back, meaning those funds are double taxed – ouch!”
– Gary Bode, Form 1120-S CPA

Two lines of the balance sheet section of Form 1120-S, U.S. Income Tax Return for an S Corporation, are devoted to such loans. Just because the IRS takes an interest in some S Corporation issue doesn’t mean it’s taboo. And that’s the case with S Corporation loans to and from Shareholders. When I prepare Form 1120-S I like to document the loan figures on page four. I think as long as good records are kept there’s no big deal with such loans. See other suggestions below. But good records aren’t always kept. I don’t know if the IRS audits specifically on shareholder loans but once an audit starts, shareholder loans usually get close inspection.

Corporate Schizophrenia

Your S Corporation is a distinct entity by itself, even though you own it. Many IRS audit parameters look for co-mingling of S Corporation and personal finances. Even I feel strange sometimes when I structure transactions between myself and the Firm. I own 100% of it. I am the S Corporation. But the IRS doesn’t see it that way.

Use formal structure with shareholder loans

Here’s what I’d like to see if I was representing your S Corporation for an IRS Form 1120-S tax audit.

  • Detailed history with documentation for all loan related transactions.
  • An actual loan document between the S Corporation and shareholder. Even though it seems like you’re only passing from one hand to the other.
  • Documentation of the loan in the Corporate minutes.
  • An established interest rate.
  • Formal payments.

If you pay attention to only one aspect of the Form 1120-S, U.S. Income Tax Return for an S Corporation, balance sheet make it loans between the Shareholders and S Corporation.

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