Bison Financial Group has a health-care plan for all employees. Dan, an employee, is single and owns 10% of Bison Financial. In 2014, the company paid $2,000 for Dan's health plan. Which of the following are correct statements? I. If Bison Financial Group is an S corporation, Dan must report the $2,000 as income and can deduct the $2,000 as an itemized medical expense deduction. II. If Bison Financial Group is a partnership, Dan must report the $2,000 as income and can deduct $2,000 as a deduction for AGI.

Question

Quizplus · Accepted Answer

If Bison Financial Group is a partnership, Dan must report the $2,000 as income and can deduct it as a deduction for AGI. In an S corporation, a more-than-2% shareholder must report the health insurance premiums as income but can deduct them as an adjustment to income, not as an itemized deduction.

Bison Financial Group Has a Health-Care Plan for All Employees