Your brother is definitely wrong about this - S-corp shareholders can absolutely make additional capital contributions without receiving new shares! This is actually a really common practice, especially in family businesses. The confusion comes from mixing up two different S-corp rules. Yes, distributions must be proportional to ownership percentages, but that restriction doesn't apply to capital contributions going INTO the business. Think of it as a one-way rule - equal treatment is required when money flows from the corporation to shareholders, but not when money flows from shareholders to the corporation. When you make an additional capital contribution: - Your ownership percentage stays exactly the same - No new shares are issued - Your stock basis increases by the contribution amount - You get some nice tax benefits from the higher basis The increased basis means you can potentially receive more tax-free distributions down the road and deduct more S-corp losses if any pass through to your personal return. So while you're putting in more money without getting more equity, there are real tax advantages that help offset this. Just make sure to document everything properly with a board resolution stating the corporation accepts your capital contribution, no shares are being issued, and the amount goes to additional paid-in capital. Have your accountant track the basis increase for tax purposes. This is exactly the kind of flexibility S-corps offer for situations like yours where you want to help fund the business without disrupting the original ownership structure you all agreed on!

Your brother is mistaken about this restriction. S-corporation shareholders absolutely can make additional capital contributions without receiving new shares - this is actually a very common practice in family businesses and completely allowed under tax law. The key distinction your brother is missing is that while S-corp distributions must be proportional to ownership percentages, capital contributions have no such requirement. These are two separate rules governing money flowing in different directions. You can contribute additional funds while maintaining your existing ownership structure. When you make this additional capital contribution, it will increase your stock basis in the S-corporation, which provides some valuable tax benefits. Higher basis means you can receive more tax-free distributions in the future and deduct more S-corp losses on your personal return if any pass through from the business. For proper documentation, you'll want to: - Create a board resolution formally accepting the capital contribution - Clearly specify that no new shares are being issued - Record it as additional paid-in capital in your books - Have your accountant track the basis adjustment This approach gives you exactly what you're looking for - a way to inject capital into the business without disrupting your original ownership agreement. Many family S-corps use this structure when members have different levels of available capital but want to preserve their initial equity arrangements.

This is an excellent question about timing and professional credentials! You definitely want to consult with a tax specialist BEFORE finalizing your LLC operating agreement and lease terms. There are several structural elements that are much easier (and cheaper) to get right upfront than to modify later. Key structural considerations that affect tax treatment include: how the LLC allocates profits/losses among members, whether you elect S-corp taxation, specific language about business purpose and entertainment restrictions, and how you handle member personal use policies. Some lease terms can also be structured to better separate business use from entertainment components. For finding the right professional, look for CPAs with the Personal Financial Specialist (PFS) designation or those who are members of specialized groups like the AICPA's Entertainment, Arts & Sports Committee. The National Association of Tax Professionals also has entertainment industry focus groups. More importantly, ask potential advisors for specific references from clients with similar luxury box arrangements. A good specialist should be able to discuss recent IRS guidance on entertainment facilities, passive activity grouping strategies for LLCs, and state conformity issues off the top of their head. Don't be afraid to pay for a consultation with 2-3 different specialists before choosing one. The upfront investment in getting the structure right will save you significantly more in both taxes and future restructuring costs. I've seen too many LLCs have to unwind and restart because they got the initial setup wrong.

As a tax professional who has worked with several luxury box arrangements, I wanted to add a few practical points that might help with your planning. First, regarding the valuation question you asked about tickets and parking - the IRS generally expects you to use "comparable market prices" for similar amenities. You can research what individual luxury suite rentals cost for single games at your venue, or look at premium season ticket packages that include parking. Document this research thoroughly as it will be crucial if questioned later. Second, I strongly recommend creating a formal "business use log" from day one. Track every time the suite is used for legitimate business meetings (with names, business purpose, agenda items, etc.) versus entertainment use. This contemporaneous documentation is your best defense against IRS challenges. Regarding your LLC structure - be very careful about the "reselling tickets for revenue" aspect. If ticket resales become a significant activity, the IRS might argue this is your primary business purpose rather than the business meeting space, which could change how your entire arrangement is classified for tax purposes. One often-overlooked issue: make sure your LLC operating agreement specifically addresses how to handle situations where members use the suite for personal entertainment. You'll need clear policies on reimbursement at fair market value to avoid constructive dividend issues. I'd recommend budgeting for both a tax attorney consultation upfront and ongoing CPA fees, as this type of arrangement typically requires more documentation and professional oversight than standard business expenses.

Has anyone considered the business impact beyond just the tax implications? If you're moving from accrual to cash, how does that affect your financial statements for purposes of getting loans or investors? Most serious businesses use accrual for a reason.

Great discussion here! As someone who's handled several accrual-to-cash conversions, I can confirm that the net adjustment approach is correct. However, I'd add a few practical considerations: First, make sure you're capturing ALL accrual items - not just AR and AP. Look for prepaid expenses, accrued expenses, deferred revenue, etc. These can significantly impact your 481(a) calculation. Second, consider the timing of when to make this change. If your client expects lower income in future years, it might make sense to delay the change to spread the adjustment over those lower-income years. Finally, document everything thoroughly. The IRS can be quite particular about method change documentation, and having detailed workpapers showing how you calculated the adjustment will save headaches if they ever audit the change. One more tip: if the client has any NOL carryforwards, those can help offset some of the additional income from the 481(a) adjustment in the early years.

I've been following this thread and wanted to add one more resource that might help. If you're having trouble getting through to anyone at the IRS or the payroll company, you can also contact the Taxpayer Advocate Service (TAS). They're an independent organization within the IRS that helps taxpayers resolve problems when normal channels aren't working. You can reach them at 1-877-777-4778 or submit Form 911 online. They're particularly helpful in situations like yours where you're facing significant hardship due to IRS processes or delays. Since you've already filed an extension and been waiting months for resolution, this could qualify as a case they'd take on. TAS can sometimes get faster responses from other IRS departments and help coordinate between you, your former employer, and the payroll company. They also provide a case advocate who will work with you throughout the process until it's resolved. The service is completely free, and they're generally much easier to reach than the main IRS phone lines. Even if they can't solve everything immediately, they can at least give you a clear timeline and next steps, which might provide some peace of mind while you're dealing with this frustrating situation.

I've been dealing with a similar situation with a former employer who disappeared after closing, and I wanted to share what finally worked for me. After months of getting nowhere with the company directly, I ended up having success by approaching this from multiple angles simultaneously. First, I contacted my state's Department of Labor to file a wage complaint - turns out not providing W2s is considered a wage violation in most states. Within a week of filing the complaint, I got a call from someone associated with the former company who suddenly had access to payroll records they claimed didn't exist before. At the same time, I also reached out to the Taxpayer Advocate Service mentioned in earlier comments. Even though my situation got resolved through the labor complaint, the TAS representative I spoke with was incredibly knowledgeable and gave me a clear roadmap of exactly what documentation I'd need if I had to file Form 4852. My advice would be to not put all your eggs in one basket - file the labor complaint, contact TAS, try to reach the payroll company directly, and start gathering your documentation for Form 4852 all at once. Sometimes the threat of official complaints is enough to motivate people to suddenly "find" records they claimed were lost. The whole experience taught me that there are way more resources available to help taxpayers in these situations than I initially realized. Don't let a defunct employer hold your taxes hostage - you have multiple paths forward!

I just went through this same situation last month! The processing fee caught me completely off guard too. What really bothers me is that TurboTax doesn't make this fee obvious until you're basically done with everything. By that point, you feel locked into finishing with them rather than starting over elsewhere. I ended up paying $44 for the processing fee on top of my $119 preparation fee - that's $163 total just to file! Next year I'm definitely paying upfront with my card to avoid that extra charge. It's frustrating because they market the "pay with refund" option as convenient, but don't emphasize the significant additional cost until it's too late to easily back out.

I had this exact same experience with TurboTax this year! The processing fee is definitely separate from the preparation fee - it's what they charge you for the convenience of deducting their fees from your refund instead of paying upfront. I think what makes it so frustrating is that they don't make this crystal clear until you're deep into the filing process. When you see "pay with refund" it sounds like a free convenience, but that $40+ processing fee can really add up. For next year, I'm planning to just pay the prep fee directly with my credit card to avoid this extra charge entirely. It's one of those situations where the "convenient" option ends up being the more expensive one.