Also since you do not receive wages, you might be considered a nonemployee shareholder.:
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Unreimbursed expenses incurred by non-employee S-corporation shareholders are generally not deductible (TC Memo 1989-207 and TC Memo 1997-446). A shareholder is not entitled to a business deduction for the payment of expenses of a corporation that he or she controls. Rev. Rul. 71-36, 1971-1 C.B. 51 which says pretty clearly: “…the sums advanced by him were expenses incurred in carrying on the business of the corporation, the business to which these expenses pertained was not the taxpayer’s business, but that of the corporation. Accordingly, the advances made by the taxpayer are not deductible in the years paid as ordinary and necessary business expenses under section 26 USC 162 of the Code.”
