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Old 03-30-2014, 11:41 PM
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S Corp Comp on Service / Consulting Income

I am aware that S-corps must pay their shareholder employees a reasonable salary. My question is how do you determine if a shareholder employee's salary is reasonable when their business income is derived from consultant sales?

If the business is earning their income on a contingency fee basis only and the only salesperson/worker in the company is the shareholder/employee can the business say that the shareholder's employee salary is a amount less than what was earned in revenue from those contingency fee sales?

Thanks.



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