Business Bad Debts

A business bad debt is defined as a loss from an obligation that was either created or acquired in your trade or business or closely related to your trade or business when it became worthless. Whether or not a business bad debt is deductible depends on whether the amount owed was previously included in the taxpayer’s gross income.

Deductibility of Meals Provided to Employees

If you are an employer who provides meals for your workers, you may be able to deduct some or all of the cost of the meals. Generally, you are limited to a deduction of only 50 percent of the cost of those meals. However, under certain circumstances, you may be able to deduct the entire cost.

Partnership Audits

Even though it is the individual partners, not the partnership, that are responsible for reporting and paying taxes on any gains or losses recognized by the partnership, audit proceedings on partnership items are conducted on the partnership, not the individual, level.

Terminating a Business

You have decided to close your business. What you really want to do is just pick up your box of personal belongings, shut the door, and walk away. But unfortunately, it is not quite that simple.

Terminating S Corporation Status

An S corporation may voluntarily terminate its status by filing a statement with the Internal Revenue Service Center where the original election was filed. In order to properly revoke an election, the consent of shareholders that at the time of revocation own more than one-half of the issued and outstanding shares is required.