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Instructions for 1120 Schedule E - Compensation of Officers??

  
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Subject Author Date
Instructions for 1120 Schedule E - Compensation of Officers?? Jose 06-08-2006
Posted by Jose on June 8, 2006, 2:42 pm
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 I have looked all over and can't find any instructions for
this. Do they exist? Specifically for (c) percent of time
devoted to business.

Lets say two people spend 20 hours a week working. One does
nothing else; the other works 40 hours a week elsewhere.
Are they 100% and 33%, both 50%, or something else?

I would really like to find actual instructions for this,
but they don't seem to exist.

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<< and does NOT constitute legal OR professional advice. >>
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Posted by ed on June 10, 2006, 4:19 pm
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 Jose wrote:

> I have looked all over and can't find any instructions for
> this. Do they exist? Specifically for (c) percent of time
> devoted to business.
>
> Lets say two people spend 20 hours a week working. One does
> nothing else; the other works 40 hours a week elsewhere.
> Are they 100% and 33%, both 50%, or something else?
>
> I would really like to find actual instructions for this,
> but they don't seem to exist.

For SALARIES paid officers, you can set tham at any
agreeable amount and reasonable for what they do. There are
no IRS instructions for this. The division of profits,
however, must be strictly proportunal to stock ownership.

ed

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Jose on June 12, 2006, 8:40 pm
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> Jose wrote:

>> I have looked all over and can't find any instructions for
>> this. Do they exist? Specifically for (c) percent of time
>> devoted to business.
>>
>> Lets say two people spend 20 hours a week working. One does
>> nothing else; the other works 40 hours a week elsewhere.
>> Are they 100% and 33%, both 50%, or something else?
>>
>> I would really like to find actual instructions for this,
>> but they don't seem to exist.

> For SALARIES paid officers, you can set tham at any
> agreeable amount and reasonable for what they do. There are
> no IRS instructions for this. The division of profits,
> however, must be strictly proportunal to stock ownership.

I understand that; but the 1120 Schedule E asks for "percent
of time devoted to business". I am wondering how that is
calculated for part time employees who are paid officers.

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Stuart A. Bronstein on June 12, 2006, 8:59 pm
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> Jose wrote:

>> I have looked all over and can't find any instructions for
>> this. Do they exist? Specifically for (c) percent of time
>> devoted to business.
>>
>> Lets say two people spend 20 hours a week working. One does
>> nothing else; the other works 40 hours a week elsewhere.
>> Are they 100% and 33%, both 50%, or something else?

> For SALARIES paid officers, you can set tham at any
> agreeable amount and reasonable for what they do. There are
> no IRS instructions for this. The division of profits,
> however, must be strictly proportunal to stock ownership.

And generally stock ownership must be proportional to capital
contributions (or equivalent).

Stu

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Harlan Lunsford on June 12, 2006, 8:40 pm
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Jose wrote:

> I have looked all over and can't find any instructions for
> this. Do they exist? Specifically for (c) percent of time
> devoted to business.
>
> Lets say two people spend 20 hours a week working. One does
> nothing else; the other works 40 hours a week elsewhere.
> Are they 100% and 33%, both 50%, or something else?
>
> I would really like to find actual instructions for this,
> but they don't seem to exist.

It means usual working time. For the first one above, 100%.
For the other, 33%.

ChEAr$,
Harlan Lunsford, EA n LA

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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