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 became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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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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Subchapter S Corporation CPA discusses Property Distributions | Form1120S Tax Preparation

Subchapter S Corporate CPA discusses proptry distributions.

Proactively planning non-standard transactions in a Subchapter S Corporation is prudent. (910) 399-2705

Subchapter S Corporations are usually have only a few shareholders.  Property often passes from the S Corporation to the shareholders.  Technically cash is property, but let’s make it interesting with a IRS Form 1120-S example utilizing land.  The main point is to consult with your CPA before committing the S Corporation to a non-standard transaction. Things get tricky fast. As in all our examples, we’ll use Subchapter S Corporation CPA, Inc., as our demo S Corporation.  The tax implications of Form 1120-S are stressed below and we assume the transaction makes sense for both Subchapter S Corporation CPA, Inc. and the Shareholder.

Basic Scenario

One Shareholder of Subchapter S Corporation CPA, Inc. wants a piece of corporate owned land.  SSCC  bought the  5 acres of land years ago, as an investment, for $300,000.

Land Worth $250,000 at time of transfer – $50,000 Loss

Generally, distributions of loss property should be avoided in S Corporations, at least from a tax perspective.  Here’s why. Subchapter S Corporation CPA, Inc. doesn’t ever get to take the $50,000 loss on the IRS Form 1120-S.  It can only take a loss if the it sells the land.  But the Shareholder’s basis in the land would have been the $250,000 FMV. So the $50,000 loss on the transfer never benefits the Shareholder either.

Land Worth $350,000 at time of transfer – $50,000 Gain

Essentially the IRS treats this transfer like a sale of the land to the shareholder at FMV. The tax consequences for the land are the same if Subchapter S Corporation CPA, Inc. sells the land to a Shareholder and he/she disposes of it, or SSCC sells it and distributes the cash to Smith.  Assuming it can be sold.  At the time of transfer, the S Corporation recognizes a gain of $50,000.  Form 1120-S allocates this gain to the Shareholder’s basis, through the Form 1120-S Schedule K-1 according to the percentage of Subchapter S Corporation CPA, Inc. they own.  Simultaneously, the shareholder’s basis reduces by the entire $350,000, but not below $0.

“Documenting Fair Market Value (FMV) at the time of  transfer is crucial if the S Corporation or shareholder is audited.”
– Gary Bode S Corporation CPA and Form 1120-S Tax Accountant

Moral of the Story

In S Corporations, the tax consequences of non standard transactions on Form-1120S deserve proactive consideration with your CPA.

I’m a Subchapter S Corporation CPA because my firm operates as an S Corporation. So I devote considerable time, including S Corporation related Continuing Professional Education to stay current on new issues. And our virtual office means we can serve your S Corporation wherever it is. Need a free consult? (910) 399-2705.

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