What is the name of your state (only U.S. law)? NC
I am part of an LLC that files as a Partnership and we have been running negative for the past 5 years. As such none of the partners (3 of us) has taken any salary or pay from the company and have been living off of personal savings (I've had no source of income). This year we will have a nice surplus to finally pay us with, but my question is, since I made no income the past 5 years can I claim I was owed a reasonable salary each year and use that as a carryforward to break up some of my income over those years for tax purposes?
So for example, if I made $300,000 this year, rather than being taxed this year at a high tax rate, spread this year's income over the past 5 years to say I was owed a reasonable salary that the company was unable to pay, for ex $50,000/yr, and therefore each year is taxed in a lower tax bracket? This makes sense to me because if I was working a normal job I would've had that salary each year and paid in that lower tax bracket each year, but now that I have a larger lump sum my taxes seem to be much higher.
Thanks!
I am part of an LLC that files as a Partnership and we have been running negative for the past 5 years. As such none of the partners (3 of us) has taken any salary or pay from the company and have been living off of personal savings (I've had no source of income). This year we will have a nice surplus to finally pay us with, but my question is, since I made no income the past 5 years can I claim I was owed a reasonable salary each year and use that as a carryforward to break up some of my income over those years for tax purposes?
So for example, if I made $300,000 this year, rather than being taxed this year at a high tax rate, spread this year's income over the past 5 years to say I was owed a reasonable salary that the company was unable to pay, for ex $50,000/yr, and therefore each year is taxed in a lower tax bracket? This makes sense to me because if I was working a normal job I would've had that salary each year and paid in that lower tax bracket each year, but now that I have a larger lump sum my taxes seem to be much higher.
Thanks!