@SCGI wrote:
My figure comes from researching actual IRS cases. The IRS in one case determined that $47,000 was too low, and in another determined that $50,000 was sufficient. I think that my statement is valid based on actual IRS lawsuits.
There actually is a court case in the link I provided (above). The IRS determined that a reasonable salary, for the years 2002 and 2003, would be $91,044 so the $50,000 figure is not set in stone; it will vary depending upon revenues and distributions.
I would hate to be in a position where I had to defend $50,000 as a reasonable salary for the sole shareholder-employee of an S corporation (that provides only services) with a net profit of $250,000.
