F
fostemi
Guest
Abezon, Pls Help
What is the name of your state? Maryland
Here is my query...
Taxpayer1 and Taxpayer2 are equal owners in a small SCorp (small meaning less that $5mm revenue) They have been recving compensation and distributions from the corp. They now want to open another SCorp2 that will be a service company to Scorp1. They want to be paid by Scorp2 and stop the compensation from Scorp1. Not to be confusing but in the eyes of the IRS what does this mean since they will not rec compensation nor distributions from SCorp1 though it will show profit. Can they do this legally and if so how does it work with the IRS. Will this raise a flag in that no compensation is given to officers of the Corp, etc. Hope I am not too confusing.
Thanks for your help
What is the name of your state? Maryland
Here is my query...
Taxpayer1 and Taxpayer2 are equal owners in a small SCorp (small meaning less that $5mm revenue) They have been recving compensation and distributions from the corp. They now want to open another SCorp2 that will be a service company to Scorp1. They want to be paid by Scorp2 and stop the compensation from Scorp1. Not to be confusing but in the eyes of the IRS what does this mean since they will not rec compensation nor distributions from SCorp1 though it will show profit. Can they do this legally and if so how does it work with the IRS. Will this raise a flag in that no compensation is given to officers of the Corp, etc. Hope I am not too confusing.
Thanks for your help
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