Both S corporations and C corporations must pay reasonable compensation to shareholder employees. This course will discuss the reasonable compensation issue for both entity types using case law as a foundation for determining the proper amount. In addition, the class will focus on reasonable compensation as a tax planning strategy, including impacts on other tax benefits, such as the §199A deduction.

Learning Objectives:

  • Describe how the reasonable compensation requirement applies to S corporation shareholders.

  • Describe how the reasonable compensation requirement applies to C corporation shareholders.

  • Apply case law principles to determine appropriate reasonable compensation amounts.

  • Calculate how reasonable compensation impacts the tax outcomes of both the corporation and the shareholder.

Education Information

IRS Program Number: NMVBP-T-00210-22-O

Length: 100 minutes plus optional question-and-answer session (no CE)

Prerequisite: None

Advanced Preparation: None

Program Level: Basic

Delivery Method: Online Webinar/Group Internet Based

Field of Study: NASBA Taxes; IRS Federal Tax Law Topics/Federal Tax Related Matters

Credit Hours: 2 CE/CPE

Instructor: Thomas Gorczynski, EA, CTP, USTCP Click here to learn more about the instructor.

All continuing education credit is provided through Gregory & Associates, Inc. which is doing business as Compass Tax Educators. Click here to learn more about our education policies. 

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