Hard to articulate, I suppose!
1) S-Corp takes in $500K
2) S-Corp pays independent contractors $100K
3) S-Corp has $400K in profit prior to paying C
4) S-Corp pays $350K to C-Corp
5) C-Corp reports $350K in receipts, pays owner $100K salary, is taxed at 21% on remaining $250K
6) S-Corp K-1 shows $50K on the K-1 as net profits
Is that better? My main concern is that the S-Corp is the primary operations with the lone outside contract, so don't want the C-Corp arm to get blown up as it doesn't have a contract with any outside party, just the related S-Corp.
