S Corporations Part 2: Determining Reasonable Compensation (Completed)

How do you determine reasonable compensation? We’ll cover every important case and provide practical methods to calculate how much compensation is reasonable. We’ll also cover basis increases that arise from shareholder debt: what works and what doesn’t work. Finally, we’ll cover what happens when an S corporation is inadvertently terminated – how you can get the train back on the track.

Topics Covered

• Reasonable compensation for shareholder-employees
• The types of debt that provide basis to shareholders
• Fixing technical violations of S corporation's eligibility rules

Learning Objectives

• Identify methods to determine reasonable compensation
• Recognize how to restructure loans to provide basis to a shareholder
• Describe what actions you can take if an S corp has ineligible shareholders or two classes of stock

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None