Real Estate Agent Loses Reasonable Compensation Case
McAlary set his compensation at $24,000 per year, though that was never paid. In 2006, the S corporation reported net income of $231,454, but paid no compensation to McAlary. Instead, McAlary took a distribution of $240,000. IRS hired a valuation expert to determine that a real estate agent should have been paid $100,755 salary out of his S Corp’s net income of $231,454.
was reclassified as
in payroll tax, interest,