Remember that the IRS looks at the "ordinary and necessary" standard for business deductions. Ask yourself: Is paying for a college degree an ordinary and necessary expense in your specific industry? For most businesses, general college tuition doesn't meet this test. The safest approach is to take business deductions only for targeted education that directly impacts your current business and take personal education credits for your degree program. Don't risk aggressive deductions that could trigger an audit!

Great discussion everyone! As someone who's been through this exact situation, I want to emphasize the importance of documentation if you do decide to deduct any education expenses. The IRS will want to see a clear business purpose for each course or program. I keep a detailed log showing how each class directly relates to my current business operations - not just vague connections, but specific skills I'm using in my work. For example, if I take a project management course, I document which client projects I'm applying those skills to and how it's improving my business performance. Also worth noting - even if some courses qualify as business deductions, you still need to be careful about how you categorize them. The IRS distinguishes between education that maintains/improves current skills versus education that qualifies you for a new trade. Make sure you're crystal clear about which category your expenses fall into before claiming any deductions.

Has anyone dealt with their state's abandoned property laws when dissolving? I'm in a similar situation, and was told that if you can't repay all the shareholder loans, the unpaid portion might need to be reported as abandoned property to the state after dissolution. Seems crazy but my accountant mentioned it.

One thing to consider that hasn't been mentioned yet is the timing of your dissolution. Since you have substantial outside basis ($135K) and are only getting $7K back, you'll have a significant capital loss. Make sure you understand the capital loss limitations - you can only deduct $3K per year against ordinary income, with the remainder carried forward. Given the size of your loss, this could take decades to fully utilize unless you have capital gains to offset it against. Also, regarding the debt vs. distribution question - since you're the sole shareholder, the tax result is essentially the same. However, from a documentation standpoint, I'd recommend treating the $7K as a partial loan repayment and then formally canceling the remaining debt. This creates a cleaner paper trail showing you attempted to collect what you could before forgiving the balance. Don't forget to file Form 966 within 30 days of adopting the plan of liquidation, and make sure your final 1120S properly reflects the debt cancellation income (even if excluded under Section 108) and the corresponding basis adjustments on your K-1.

tbh ur better off faxing them. at least u know someone has to physically touch the paper eventually lol

Another trick that worked for me: try calling the business tax line at 1-800-829-4933 and ask them to transfer you to individual tax help. Sometimes they can bypass the main queue. Also downloaded the IRS2Go app which at least shows your refund status without having to call - might save you some frustration while you're waiting to get through!

Just wanted to add that the IRS actually does process paper Form 1065s much slower than electronic filings - typically 8-12 weeks versus 2-3 weeks for e-filed returns. So don't panic if you don't hear anything for a while after mailing. One tip I learned the hard way: make sure you sign and date the form in blue ink, not black. The IRS scanning equipment apparently has trouble distinguishing black ink signatures from photocopied signatures, which can delay processing. Also double-check that you've included Form 8832 if you're electing partnership tax treatment for your LLC - that's a common oversight that can cause headaches later. Good luck with your filing! Paper filing definitely works, it just takes patience.

Great question about Form 8832! If your LLC has more than one member (which yours does with 4 partners), the IRS automatically treats it as a partnership for tax purposes by default - no election needed. Form 8832 is only required if you want to elect a DIFFERENT tax treatment (like corporate taxation). So if you want partnership treatment (which is the default for multi-member LLCs), you don't need to file Form 8832 at all. You can just proceed with filing your Form 1065. The fact that you got an EIN doesn't constitute making any particular tax election - that's just getting a tax ID number. However, if you ever want to change your tax classification in the future (say, elect S-corp treatment), THEN you'd need to file Form 8832 or Form 2553. But for now, you're all set without any additional election forms!

Don't forget that the documentation matters as much as the classification! Regardless of whether you claim 50% or 100%, always record: 1. Who attended 2. Business purpose discussed 3. Date and location 4. Cost amount I learned this the hard way when I got a notice from the IRS questioning my meal deductions. Having a calendar invite showing "Board Meeting with Joe" wasn't enough. Now I take notes during meals and snap a pic of the receipt with my notes.

Great question! As someone who's dealt with this exact scenario, the key distinction is employment status, not board membership. Board members who aren't on your W-2 payroll are generally limited to the 50% deduction, even if they're shareholders. However, there are a few nuances worth considering: 1. **Timing matters**: If the meal occurs during an official board meeting where you're providing food as part of the meeting (similar to providing refreshments), this could potentially be treated differently than a casual business lunch. 2. **Documentation is critical**: Keep detailed records showing the business purpose, attendees, topics discussed, and how it relates to your S-Corp operations. This becomes especially important if the IRS questions your deductions. 3. **Consider the bigger picture**: While you might be limited to 50% on these specific meals, make sure you're capturing all legitimate business meal expenses throughout the year - they add up quickly. One tip: If your board meetings involve multiple people (other board members, key employees), the dynamics of the deduction might change. But for one-on-one advisory meals with non-employee board members, 50% is typically the safe approach. Always consult with your tax professional for your specific situation, but this framework should help you categorize these expenses appropriately.