please clarify. how can you have money to make a dividend distribution but you don't have money to pay a salary? since you are an officer/shareholder any salary and or bonus paid to you goes on line 13. you should consult a tax pro who can go over your numbers and give you proper advice. we can see nothing. The IRS says reasonable comp for services performed but based on court cases and other rulings and findings that really does not come down to any formula such as % of profits before compensation and even whether a salary has to be taken in years the Corp is unprofitable. perhaps liquidating the C corp and forming a single-member LLC would be better for you.
