Can the S corp deduct unreimbursed mileage incurred by the s corp shareholder/employee and treat it as Paid in Capital? There is an accountable plan. However, the company needed to retain its cash to pay vendors. The shareholder/employee has a written mileage log. Can the s corp deduct the mileage using the standard mileage rate and then increase  Paid in Capital? Will it hold up to say that the S corp in substance reimbursed the shareholder, however the shareholder said keep the money, and let's treat it is Paid in Capital? Or, are those miles non-deductible by the S corp since there was no cash payment to the shareholder/employee?