I have an opportunity to buy into a small percentage of my employer which is a financial services partnership. Due to becoming a partner, my current W2 income will need to be shifted to guaranteed payments and distributions. Since my initial ownership percentage will be relatively small, a vast majority of my compensation will come in the form of guaranteed payments for services. I figure guaranteed payments will end up being 90K and distributions of maybe 5k. Would it make sense to have my ownership interest be owned by and LLC taxed as an S Corp? In that situation would the IRS want my reasonable salary to be at least the guaranteed payments received from the partnership or can I have a lower salary and still meet the reasonable comp threshold?
Thank you for the question. We answered it on today’s show on 2.19.23. Thanks for listening. MJK & MNS