S-Corp receipts passed to C-Corp/

[Critter]

@LuckyLefty8 

6) S-Corp K-1 shows $50K on the K-1 as net profits   This is NOT considered wages/salary and will not satisfy the IRS salary requirement.  This mistake alone will get you audited.  PLEASE seek professional guidance. 

[LuckyLefty8]

@Critter

Which part of the story changed?  I think it's pretty straightforward, never suggested funneling "untaxed" dollars to a C-Corp, or anything remotely similar to that.  

[LuckyLefty8]

@Critter 

Good lord, obviously the $50K net profit is not wages and salaries.  The $50K net profit is AFTER payments to C-Corp for services, independent contractors, and taking a salary.

[Critter]

What you are not getting is that the $ passed thru on the K1 will  NOT satisfy the salary/wage requirement on the S-corp return and IMO if you have $400K of income due to your efforts a draw of only $50K will not pass the smell test.   And you do NOT work for the C-Corp so wages paid for nothing there is again not kosher ... seek local council to do things correct the first time or expect to pay big time later when the IRS disallows your scheme. 

[LuckyLefty8]

@Critter 

I'm going to try this one more time, as the only thing you have helped with is maybe pointing out that I didn't mention taking an S salary in my fact pattern before calculating net income to the S.

1) S gets paid $500K from one client for consulting services

2) S pays independent contractors $100K

3) S pays salary to me, let's say $50K for running the S

4) $350K leftover, of which S pays my C $300K for services (management, consulting, some operations for S, administering the independent contracts, whatever) - $50K remains in S-Corp that is reported on K-1

5) C has $300K of receipts - pays $100K for salary to me, keeps $200K in retained earnings

6) $200K used to loan to real estate entity that I own, and other business ventures with 3rd parties

Again, any holes in this?  The facts cannot be laid out more clearly.

[Critter]

Ok ... so you changed the story again ... obviously this is not something easily discussed in this type of forum.

I still think you need to seek a local professional consultation ... if your business is taking in $500K it can well afford to do so and stop relying on nameless faceless posters on a public internet forum who cannot be held responsible for their opinions.   

What if we told you in the beginning that everything is OK and we were dead wrong then sadly ONLY you would be to blame.  So us telling you to pay a few dollars for a professional opinion is not a bad idea.  

[LuckyLefty8]

@Critter 

ah, okay - just went back and checked and I did say 'not' take a salary from S-Corp.  That was clearly a mistake on my part, I'm well aware that a salary needs to be taken.  

I guess to answer your question, I was more so looking for conversation about payments between related companies where the stream goes ABC Client to S, then S to C.  Seems to me if C is providing S with the services that S sells to the client, then I could make 15 C-Corps and pay them all, and take salaries from them all if I'd like to.

Cheers,