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Means test issues in a CH 7 due to clients handling of their corporation.
Shawn: tough answer, but file with presumption. Make sure I & j show only the remaining income and use the boxes at the bottom of I & j to emphasize the loss of the phantom income.
Dennis McGoldrick
350 S. Crenshaw Bl., #A207B
Torrance, CA 90503
On May 3, 2010, at 8:45 AM, "shawnswhite" wrote:
Married Joint debtors own 100% of an S Corp. They had a business that was failing. The wife worked for the business and paid herself a salary. I believe she did this to make her wages a priority claim in the event the business shutdown. The husband had a day job.
Almost all of her wages were invested back into the business so basically she made nothing from the corporation though on paper, because of her salary, she shows enough wages that combined with the husbands salary causes them to fail the means test.
The business has now been shut down. Is there anyway to factor the business losses into the means test? Or should I file the means test as "presumption arises" and try to rebut the presumption?
Now that the business is gone they really don't have the income (because she was using it to prop up a failing business they really never did have the income) and delaying the filing is not an option.
Any advice is appreciated.
Shawn White
Shawn: tough answer, but file with presumption. Make sure I & j show only the remaining income and use the boxes at the bottom of I & j to emphasize the loss of the phantom income.Dennis McGoldrick350 S. Crenshaw Bl., #A207BTorrance, CA 90503On May 3, 2010, at 8:45 AM, "shawnswhite" <shawn@cabankrupt.com> wrote:
Married Joint debtors own 100% of an S Corp. They had a business that was failing. The wife worked for the business and paid herself a salary. I believe she did this to make her wages a priority claim in the event the business shutdown. The husband had a day job.
Almost all of her wages were invested back into the business so basically she made nothing from the corporation though on paper, because of her salary, she shows enough wages that combined with the husbands salary causes them to fail the means test.
The business has now been shut down. Is there anyway to factor the business losses into the means test? Or should I file the means test as "presumption arises" and try to rebut the presumption?
Now that the business is gone they really don't have the income (because she was using it to prop up a failing business they really never did have the income) and delaying the filing is not an option.
Any advice is appreciated.
Shawn White
The post was migrated from Yahoo.
Married Joint debtors own 100% of an S Corp. They had a business that was failing. The wife worked for the business and paid herself a salary. I believe she did this to make her wages a priority claim in the event the business shutdown. The husband had a day job.
Almost all of her wages were invested back into the business so basically she made nothing from the corporation though on paper, because of her salary, she shows enough wages that combined with the husbands salary causes them to fail the means test.
The business has now been shut down. Is there anyway to factor the business losses into the means test? Or should I file the means test as "presumption arises" and try to rebut the presumption?
Now that the business is gone they really don't have the income (because she was using it to prop up a failing business they really never did have the income) and delaying the filing is not an option.
Any advice is appreciated.
Shawn White
The post was migrated from Yahoo.