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    Wholly Owned LLC

    There's no "reasonable salary" requirement for the wholly owned LLCs. Or is there?


    (by "reasonable salary" i'm referring to the rule which S corp shareholders are subject to)

    #2
    Well, is it treated as a "disregarded entity?" As such, it would be ignored and a Sche C prepared subj to SE tax. No salary. Or did he ask that it be taxed as an S-Corp?

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      #3
      I take it from the nature of your question that the LLC has elected for the business to be treated as an "S-Corp". If so, then the business will be expected to conform to all rules which apply to S-Corps, including reasonable salary issues. The IRS is looking at the S-Corp itself, irrespective of whether the underlying ownership is via being an LLC member or a shareholder.
      Last edited by JohnH; 01-12-2011, 12:27 PM.
      "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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        #4
        more info

        Originally posted by tacks View Post
        There's no "reasonable salary" requirement for the wholly owned LLCs. Or is there?


        (by "reasonable salary" i'm referring to the rule which S corp shareholders are subject to)
        Originally posted by JohnH View Post
        I take it from the nature of your question that the LLC has elected for the business to be treated as an "S-Corp". If so, then the business will be expected to conform to all rules which apply to S-Corps, including reasonable salary issues. The IRS is looking at the S-Corp itself, irrespective of whether the underlying ownership is via being an LLC member or a shareholder.
        Yup....need more info. If no election, no, if election for S-corp treatment, yes.

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          #5
          Big thanks

          Thanks to everyone for responding. I was at an associate's place of business doing tax planning for him and his associates. In other words there's fair amount of $$$$$ contingent on what i'm able to do. And therefor what i know.

          Getting fast answers was crucial -- more helpful than i can describe.

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