I agree with @Anonymous_ in that you need to consider tax guidance on what may be "reasonable" wages given your business model. This area is a facts and circumstances situation. If this is more along the lines of a consulting business or where your services are what drives the business, then I would also agree that the 45/100,000 wage and distribution ratio may not pass an IRS exam.
Additionally, your distributions will not be taxable as follows:
- to the extent that your accumulated adjustments account (AAA) is positive
- you have tax basis
Finally, you also need to be aware that the AAA cannot go negative as a result of distributions. So there can be instances where the distribution reflected Sch M-2 will not agree with what is reflected on your K-1.
There are many other nuances with S corporations, so you may want to meet with a tax professional to get an understanding of how everything flows sooner rather than later.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
