Partnership paying one of its partners a wage to manage the partnership

[duanecpa]

Partnership has a board of directors. Board of directors hired one of the partners to manage the business of the partnership. Are there any circumstances when a partner can receive a W-2 from the partnership for which he/she is a partner and was hired by the partnership board of directors to manage the partnership business?

Citations please.

Thank you.

Duane

[kathyc2]

Why not just treat it correctly as guaranteed payment?

[spanel]

Why not just treat it correctly as guaranteed payment?

Agreed.

Chris

[ttbtaxes]

Citations please.

Take a look at Riether v. United States, 919 F.Supp.2d 1140. Also, there is an excellent article about this in the August 2014 edition of the Journal of Accountancy. It lays out the risks involved and cites other cases as well.