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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2379
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I HAVE CLIENT THAT WILL FORM A S CORP. THER WILL BE 3 SHAREHOLDERS

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I HAVE CLIENT THAT WILL FORM A S CORP. THER WILL BE 3 SHAREHOLDERS - ONE WILL PUT IN $60k FOR 40% OWNERSHIP, THE OTHER TWO WILL PROVIDE THEIR SERVICES IN EXCHANGE FOR THE ONWERSHIP INTEREST OF 30% EACH. I REALIZE THAT THE SERVICES PROVIDED WILL BE INCOME TO THEM. IS THERE ANOTHER WAY TO STRUCTURE THIS?

Anne :

Hi

Anne :

Thank you for using justanswer.

Anne :

What did you have in mind?

Anne :

 


The treatment of sweat equity in S corporations is normally handled through a salary, plus the gradual transfer of shares to the individual providing the labor in exchange for an ownership interest.

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