S Corp and W2

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  • thetaxman2200
    Member
    • Jan 2012
    • 53
    #1

    S Corp and W2

    Good Afternoon

    I have two clients who will be purchasing a business and an investment, however will not be participating in the day to day business. They will own 50% each and will have a manager and employee and sub contractors working, again they will not participate in the day to day activities. Do I need to issue them paychecks (W2 at the end of the year?). I am thinking this would be consider passive income/Losses!

    Thank you in advance.
    Tags: None
    • TAXNJ
      Senior Member
      • Jan 2007
      • 2106
      #2
      Have to....

      make sure "no services". See reference below (not all inclusive) along with your other research.

      https://www.irs.gov/businesses/small...orate-officers
      Always cite your source for support to defend your opinion

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