Yes, when I brought him onboard we did handle the stock issuance as a purchase based on the same purchase price I paid when the company issued stock to myself (when the company was founded a number of years back).
The stock purchase was for a little over $1,000. So I was incorrect in stating the company had no income, the only income the company had was his stock purchase. Expenditures for patents and other business expenses was well over $20K so the company is not making any money.
With that said I still have these questions...
1. Where in TurboTax Business do I enter the $1K income from stock purchase? Should I just make my own category under Product Sales?
2. How do I handle his lack of wage/distribution (TurboTax is warning me about audit risk)? Do I make a small distribution retroactively to cover the small amount of time he participated in the company? As I mentioned he has only really been on a handful of conference calls and is not tasked with any real work or deliverables.
Thank you so much for you help!
