80% of S-Corp profit on K-1

[veritas]

Then I

Veritas - the OP was quite clear. It did not say distribution - it said profit.

don't see what's the problem?

[taxxcpa]

1099 to shareholder

This is an old subject. He is supposed to take a reasonable salary. What is reasonable is open to interpretation, but obviously at least a minimum wage. If he hasn't done so, I and others have used the stratagem of showing officer compensation, issuing a 1099-misc, and reporting on the 1040 as self-employment income. It is a flawed approach, but it may be better than nothing.

I have a client that does this with a C Corporation. He issues a 1099 to himself for about $100,000, reports it on a Schedule C. He also takes some deductions on his Schedule C and sometimes has other Schedule C income.

[veritas]

I would not

I have a client that does this with a C Corporation. He issues a 1099 to himself for about $100,000, reports it on a Schedule C. He also takes some deductions on his Schedule C and sometimes has other Schedule C income.

issue a 1099 for what should be wages. And I definitely would not take deductions on a Sch C.