Tax law places the more than 2 percent shareholder of an S corporation between a rock and a hard place with respect to his health insurance deduction.

First, if the S corporation pays for the health insurance of the more than 2 percent owner, then the cost of that health insurance must be treated as additional compensation to the shareholder-employee. Thus, at the S corporation level, the more than 2 percent shareholder receives no fringe benefit for health insurance.

Second, the ... Log in to view full article.