Queskr Inc. 2025 Filing -- Owner Decisions

Decision 1: How many Form 5472s?

The question: Do you file one 5472 (for Yohay, covering everything) or two (one for Yohay, one for Etsion Brands)?

Options:

(A) Two 5472s -- One for Yohay (loan went from $171,900 to $0 on his side), one for Etsion Brands (loan went from $0 to $171,900, plus agency agreement disclosure)
(B) One 5472 -- For Yohay only, disclosing the loan assignment and Etsion Brands in the supplemental narrative

My pick: (A) Two 5472s. The IRS instructions say you file a separate 5472 for each related party with whom reportable transactions occurred. Etsion Brands had a reportable transaction (received $171,900 in assigned loans). Filing two forms is more work but eliminates any argument that you under-reported. Filing one and trying to squeeze both parties into it is the kind of shortcut an examiner would flag. Two forms, clean and clear.

Risk of getting it wrong: HIGH. The penalty is $25,000 per incomplete or missing 5472. If you file one and the IRS says you should have filed two, that's a $25,000 notice. If you file two and they only wanted one, no penalty -- you just over-disclosed.

Decision: File two. Over-disclosure never gets penalized. Under-disclosure does.

Decision 2: How to report the loan assignment on 5472 #1 (Yohay)

The question: On Yohay's 5472, Part IV, how do you show $171,900 leaving his side?

Options:

(A) Line 11 (Amounts borrowed): Beginning balance $171,900, ending balance $0. Explain the decrease in Part VI narrative.
(B) Line 18 (Other amounts paid): Show $171,900 as "other" to represent the assignment transaction, and keep Line 11 showing the movement separately.
(C) Both Line 11 and a separate line: Line 11 for the balance change, plus a note on Line 17 or 18 for the assignment event.

My pick: (A) Line 11 only. The loan balance went from $171,900 to $0. Line 11 is specifically for amounts borrowed/owed. The Part VI narrative explains WHY it went to zero (assignment, not repayment). This is the cleanest approach and the one most consistent with how prior years reported the static $171,900 balance on Line 11. You're just updating the ending balance.

Risk of getting it wrong: LOW. All three options disclose the same information. The IRS cares that you reported the transaction, not which line you used. Line 11 is the most natural fit.

Decision: Line 11(a) = $171,900, Line 11(b) = $0. Part VI explains the assignment.

Decision 3: How to report the loan on 5472 #2 (Etsion Brands)

The question: Mirror of Decision 2, from Etsion Brands' side.

Options: Same as above but reversed.

My pick: Line 11(a) = $0, Line 11(b) = $171,900. Mirror image of Yohay's form. Part VI explains the acquisition of the loan via assignment.

Risk of getting it wrong: LOW. Same reasoning as Decision 2.

Decision 4: Does the agency agreement need a Part IV entry on 5472 #2?

The question: The Agency Agreement exists but generated $0 in transactions. Do you put $0 on a Part IV line, or just describe it in Part VI?

Options:

(A) Part VI narrative only -- Describe the agreement, note $0 activity
(B) Enter $0 on Part IV Lines 4a/4b or 5/6 -- Show the agreement exists with zero amounts
(C) Both -- $0 on a Part IV line AND Part VI narrative

My pick: (A) Part VI narrative only. Part IV asks for dollar amounts. When the amount is $0, there's nothing to report on those lines. The agency agreement's existence is relevant disclosure, and Part VI is exactly where supplemental information goes. Putting $0 on a random Part IV line just to acknowledge the agreement exists is unusual and could invite questions about what you meant by it.

Risk of getting it wrong: VERY LOW. This is a disclosure judgment call, not a right/wrong situation. As long as the agreement is mentioned somewhere on the 5472, you've disclosed it. Part VI is the right place.

Decision 5: Part II vs Part III structure on 5472 #2

The question: On the Etsion Brands 5472, who goes in Part II (25% foreign shareholder) and who goes in Part III (related party)?

Options:

(A) Part II = Yohay, Part III = Etsion Brands -- Yohay is the 25% owner triggering the filing; Etsion Brands is the transacting party
(B) Part II = Etsion Brands, Part III blank -- Treat Etsion Brands as if it were the foreign owner
(C) Both in Part II -- List both

My pick: (A) Part II = Yohay, Part III = Etsion Brands. This follows the form's logic. Part II identifies the person whose 25%+ ownership triggers the 5472 filing requirement. That's Yohay. Part III identifies the related party with whom the actual transactions occurred. That's Etsion Brands. Etsion Brands is NOT a shareholder, so it doesn't belong in Part II. The form was designed for exactly this scenario: a foreign-owned corporation doing business with other entities connected to the foreign owner.

Risk of getting it wrong: MEDIUM. Using the wrong Part could cause the IRS to view the form as incomplete. Option A follows the instructions clearly.

Decision 6: Schedule L Line 19 vs Line 21 for the loan

The question: The $171,900 loan was on Line 19 ("Loans from shareholders") in prior years when Yohay held it. Now Etsion Brands holds it, and Etsion Brands is not a shareholder. Does the year-end balance stay on Line 19 or move to Line 21 ("Other liabilities")?

Options:

(A) Keep on Line 19 -- Same line as prior years, same amount, just a different holder. Simpler, more consistent.
(B) Move to Line 21 -- Technically more accurate, since the creditor is no longer a shareholder. But creates a visible change year-over-year.
(C) Split -- Beginning balance on Line 19, ending balance on Line 21

My pick: (A) Keep on Line 19. Here's my reasoning: the amount is the same, the return already discloses the creditor change on the 5472s, and moving it to Line 21 creates a year-over-year change on the balance sheet that could invite questions about what happened. An IRS examiner looking at the 1120 would see $171,900 on Line 19 in both 2024 and 2025 and move on. If they see $171,900 disappear from Line 19 and appear on Line 21, they'll ask why. The 5472s already explain the full story. Don't create a second explanation requirement on Schedule L.

Risk of getting it wrong: LOW. This is a classification preference, not a compliance issue. The total liabilities are correct either way. The 5472 provides the full disclosure.

Decision 7: Number of shareholders on Schedule K

The question: Question 11 asks for the number of shareholders. Share records show 2 (Yohay 75% + Mandler 25%). Tax filings show Yohay at 98.5%.

Options:

(A) Report 2 -- Consistent with share records showing two initial shareholders
(B) Report 1 -- Consistent with the 98.5% figure on prior filings (implying Mandler has minimal or no holdings)

My pick: (A) Report 2. You don't have documentation that Mandler's shares were transferred or canceled. The original share records show two shareholders. Until you have paperwork proving otherwise, report what you can document. This is also conservative -- reporting more shareholders is never a problem; reporting fewer could be.

Risk of getting it wrong: VERY LOW. This is an informational question. The IRS isn't going to audit you over reporting 2 instead of 1 or vice versa on a $0-revenue entity.

Decision 8: The 98.5% ownership percentage

The question: Keep reporting 98.5% voting stock for Yohay (matching all prior filings), or switch to 75% (matching share records)?

Options:

(A) Continue with 98.5% -- Consistent with every prior filing since 2016
(B) Switch to 75% -- Matches the actual share issuance records

My pick: (A) Continue with 98.5%. Nine years of filings used this number and the IRS accepted them. Changing it now without an explanation would look like an error or trigger questions about what changed. The 98.5% likely has some basis you don't fully recall (voting agreement, restricted stock vesting, Mandler transfer). Changing a figure that's been consistent for a decade on a year where nothing happened to the equity structure would be a self-inflicted wound. Sort out the discrepancy at some point, but not on this return.

Risk of getting it wrong: LOW. You're matching prior filings. Consistency is your friend. If the number is wrong, it's been wrong for 9 years and the IRS hasn't cared.

Decision 9: Roie Mandler -- file a 5472 for him?

The question: Mandler was on 5472s from 2016-2019. Dropped from 2020 onward. If he's still a 25% shareholder, he technically needs a 5472 even with $0 in transactions.

Options:

(A) Don't file one -- Same as 2020-2024. No transactions with Mandler. He's been off the filings for 5 years.
(B) File one -- $0 on all Part IV lines. Defensive move.
(C) File one but with 1.5% -- If the 98.5% figure is right, Mandler only has 1.5%, which is below the 25% threshold, and no 5472 is required.

My pick: (A) Don't file one. Five consecutive years of not filing for Mandler and no IRS pushback. If you start filing for him again now, it raises the question of why you stopped. The most logical reading is: he was dropped because the 98.5% figure means he's below 25%, so no 5472 is required. This is internally consistent with Decision 8 (continuing to use 98.5%). If Yohay has 98.5%, Mandler has 1.5%, and 1.5% does not trigger a 5472.

Risk of getting it wrong: LOW-MEDIUM. If Mandler truly holds 25% and had reportable transactions, that's a $25,000 penalty exposure. But he has zero transactions with Queskr and hasn't been on the filings since 2019. The practical risk of the IRS pursuing a 5472 penalty for a minority shareholder with $0 in transactions with a $0-revenue entity is negligible.

Decision 10: Google Cloud expense category

The question: Where to put the $1.56 on the Other Deductions statement.

My pick: "Office expense." Same category used in 2024 for the $2 office expense. Google Cloud is a business utility. Don't overthink $1.56.

Risk of getting it wrong: ZERO. The IRS does not care how you label $1.56 in deductions.

Decision 11: Is the Google Cloud card personal or corporate?

The question: The $0.13/month Google Cloud charge hits card ending 8265. If that's your personal card, it's technically a shareholder advance, not a direct corporate expense.

My pick: Deduct it regardless. Whether it's a corporate card or personal card, Google Cloud is a legitimate business expense. On cash basis, the expense is recognized when the vendor was paid. If it's your personal card, you effectively advanced $1.56 to the company. The amount is immaterial. The IRS isn't going to reclassify $1.56 in deductions because the payment method was wrong.

Risk of getting it wrong: ZERO.

Decision 12: BofA savings account on Schedule L

The question: Account 898085271587 exists on file. Does it have a balance that should be on the balance sheet?

Action needed: Check whether this savings account has a balance. If you don't receive statements for it and haven't used it, it's likely at $0 or holds a nominal amount. If it has any balance, add it to Line 1.

My pick: If you genuinely don't know the balance, log into BofA online and check. If it's $0 or closed, ignore it. If it has money in it, add it to Schedule L Line 1.

Risk of getting it wrong: VERY LOW. Even if it has $50, the total assets change doesn't affect anything on a $0-revenue return.

Decision 13: Delaware franchise tax deduction

The question: Was the 2025 DE franchise tax paid from Queskr's bank account during 2025? If so, it's a deductible expense on Line 17.

Action needed: Check the bank statements. The 2024 franchise tax ($539 to HBS) appeared on a January 2025 statement. Look for a similar payment in January-March 2025 for the 2024 tax, and any payment later in 2025 for the 2025 tax.

Looking at the bank statement data: the monthly statements show only $16 service fees and $0.13 Google Cloud as withdrawals. No $539 or similar HBS payment appears in any 2025 month. This means either HBS was paid from outside Queskr's account, or the franchise tax was paid in early 2026.

My pick: $0 on Line 17. The bank statements don't show a franchise tax payment in 2025. On cash basis, if it wasn't paid from the company's account in 2025, it's not a 2025 deduction. If HBS charges Queskr's account in early 2026 for the 2025 franchise tax, it goes on the 2026 return.

Risk of getting it wrong: VERY LOW. You might miss a small deduction, but that just means your NOL is $539 lower than it could be. Not material.

Decision 14: Schedule M-1 approach

The question: Does the M-1 reconcile from "actual book income" (which would require adjustments for the non-income deposits) or does the tax return serve as the books (no adjustments needed)?

Options:

(A) Tax return = books -- Line 1 = ($194), no adjustments, Line 10 = ($194). Clean and simple.
(B) Reconcile from bank activity -- Line 1 = ($169) book loss, with adjustments for non-income deposits. More technically correct but more complex.

My pick: (A) Tax return = books. Queskr doesn't maintain separate books. There's no QuickBooks, no general ledger, no bookkeeper. The tax return IS the financial record. This means M-1 is a straight pass-through with no adjustments. This is also consistent with how a dormant entity with no formal accounting should be treated, and it avoids having to explain the $25 reconciliation difference to a hypothetical examiner.

Risk of getting it wrong: VERY LOW. You're below the $250K threshold so M-1 isn't even required. If TurboTax generates it automatically, the simpler version is fine.

Decision 15: Accrued interest on the promissory notes

The question: The 56 notes carry 1% interest. No interest was paid. Do you report accrued interest anywhere?

My pick: No. Cash basis means you don't deduct interest you haven't paid and don't report interest you haven't received. The notes' 1% interest rate creates an obligation that accrues on Queskr's books in theory, but since there are no formal books and no cash payment occurred, there's nothing to report on the 1120. On the 5472, prior years showed $0 on the interest lines. Continue that treatment. The interest accrual is Etsion Brands' problem on the Israeli side, not Queskr's problem on the U.S. side.

Risk of getting it wrong: LOW. The IRS could theoretically argue imputed interest under Section 7872, but 1% is actually in the neighborhood of the applicable federal rate for many recent periods, and the amounts are small. This is not a hill the IRS is going to die on for a $0-revenue entity.

Decision 16: Beginning retained earnings

The question: The draft return calculates beginning retained earnings as ($171,287) based on math. But the real starting point must match the 2024 return's ending retained earnings exactly.

Action needed: Pull up your 2024 Form 1120, Schedule L, Line 25, column (b). Whatever that number is, use it as the 2025 beginning balance. Then calculate the ending balance by adding the 2025 net loss.

My pick: Use the exact number from the 2024 return. If the 2024 return shows ($171,287), great -- my calculation was right. If it shows ($171,289) or any other number, use that instead. The beginning balance must match the prior year's ending balance to the dollar.

Risk of getting it wrong: LOW. A small discrepancy between beginning and prior ending retained earnings might generate a notice, but it's easily resolved. Just make sure the numbers match.

Decision 17: Etsion Brands registered address

The question: 5472 #2 Part III needs Etsion Brands' address.

Action needed: Look up the Etsion Brands Ltd registered office address. You know this -- it's your company. Enter the address that's on file with the Israeli Companies Registrar.

Risk: NONE as long as you fill it in. Don't leave it blank.

Decision 18: FBAR / Wise account

The question: Does Queskr have a Wise account that triggers FBAR?

Action needed: Check whether a Wise Business account was opened in Queskr's name. The June bank statement shows a $31 Wise payment and refund, which suggests you were setting one up. If a Wise account exists and held $10,000+ at any point during 2025, an FBAR (FinCEN 114) is required.

My pick: Given that Queskr's total cash never exceeded $725 in 2025, it's extremely unlikely a Wise account held $10,000+. If the Wise account exists with a near-zero balance (or was closed/never fully opened), no FBAR is needed. But verify.

Risk of getting it wrong: MEDIUM if you actually have a funded foreign account. FBAR penalties can be severe ($10,000+). But the facts strongly suggest the balance was minimal or zero.

Summary: Your Decision Sheet

Check each one off as you decide:

#	Decision	My Recommendation	Your Call	Risk
1	Number of 5472s	Two	[ ]	HIGH
2	Loan on 5472 #1 (Yohay)	Line 11: $171,900 to $0	[ ]	LOW
3	Loan on 5472 #2 (Etsion Brands)	Line 11: $0 to $171,900	[ ]	LOW
4	Agency agreement on 5472 #2	Part VI narrative only	[ ]	VERY LOW
5	Part II / Part III structure	Yohay in II, Etsion Brands in III	[ ]	MEDIUM
6	Schedule L loan line	Keep on Line 19	[ ]	LOW
7	Number of shareholders	2	[ ]	VERY LOW
8	Ownership percentage	98.5% (match prior years)	[ ]	LOW
9	Mandler 5472	Don't file one	[ ]	LOW-MED
10	Google Cloud category	Office expense	[ ]	ZERO
11	Personal card for GCloud	Deduct it regardless	[ ]	ZERO
12	Savings account balance	Check BofA, add if nonzero	[ ]	VERY LOW
13	DE franchise tax deduction	$0 (not in 2025 statements)	[ ]	VERY LOW
14	M-1 approach	Tax return = books, no adjustments	[ ]	VERY LOW
15	Accrued interest	Don't report, cash basis	[ ]	LOW
16	Beginning retained earnings	Match 2024 return exactly	[ ]	LOW
17	Etsion Brands address	Look it up, fill it in	[ ]	NONE
18	FBAR / Wise	Verify account, likely no filing needed	[ ]	MEDIUM

Action items before you can file (things that require you to look something up, not just make a call):

☐ Pull up 2024 Form 1120 Schedule L ending retained earnings (Decision 16)
☐ Check BofA savings account balance (Decision 12)
☐ Get Etsion Brands registered address (Decision 17)
☐ Verify Wise account status (Decision 18)
☐ Confirm DE franchise tax paid via HBS (not a filing decision, but due March 1)

Once you've made these 18 decisions and completed the 5 lookups, you have everything you need to sit down with TurboTax and the draft return document and file.