Phantom Income

Posted by BKHM CPAs on Wed, Aug 09, 2017 @ 09:44 AM

It comes as a surprise to some clients who are involved in a partnership or S-Corporation that they owe money on April 15th. The clients did not receive any cash from the partnership so they believe no tax is due. This is a common misconception as a lot of business owners believe they only get taxed on their distributions. Instead of educating the clients some accountants explain it away as phantom income.

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Topics: Phantom Income