Question
S corp owner has a gift car that he lets the s corp use. Can the S corp then reimburse that to the owner/employee and take a deduction?
This is for a S corp in which the owner is the employee.
The owner/employee has a $20 gift card/coupon to a store. The S. Corp is going to incur a business expense at that same store for an item that would be 100% deductible. If during check out, the tax payer uses that gift card, could then the S. Corp reimburse the owner for that $20? By doing so, the S corp gets the full deduction. So if the expense was $100, the S corp pays $80 at the store, and reimburses $20 to the owner/employee, and writes off the full $100.
My opinion that is fine as that is almost like the $20 was just cash the owner used to which would have been reimbursable to the corporation.
Thanks!
