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What am I worth is an interesting question because it largely depends on who’s asking and why? An insurance advisor is considering your future. A headhunter is examining your track record and potential. A mineralogist would be assessing the value of your trace elements (about $160 for the average person). But what we are concerned …
A big thank you to all of our users! Thanks for making RCReports the go-to solution for CPA’s and Financial Advisors when Reasonable Compensation is on the line. We know you are in the depths of tax season so we are keeping this month’s newsletter short – see below for the sweet.
The Year In Review: 2013 brought us some great insight into the field of Reasonable Compensation by way of the McAlary case. Compensation Agreements – McAlary had a Compensation Agreement, but the courts didn’t buy it: “We are not persuaded that the remuneration agreement represents a sound measure of the value of the services that Mr. McAlary provided …
It is important to talk with your S Corp clients now about their Reasonable Compensation. Most S Corps, whose fiscal year matches the calendar year, must have their payroll completed before year-end. Waiting until next year to address this issue with your clients could cost them big.
A small business owner I know jokes that his business card should read “President and Janitor” (and everything in between). So, when my friend tries to determine his reasonable compensation figure (at his accountant’s request), should he be compensated as President? Janitor? Or somewhere in between? Where in between?
“Another one bites the dust.” Just a line that popped into my head when I read the recent Reasonable Compensation (RC) case: Sean McAlary Ltd, Inc. v. Commissioner. McAlary Ltd. joins a long list of S Corps that have lost their RC challenges in court, about 25 in all. The McAlary case is not that different …
