Thats were it gets tricky... Recouping value for the time you put into the
company, at a later time.
If you were valuing your company preparing for aquisition, or setting share
value of your stock to plan for taking on investors or partners, you may
want to get credit for your time that you didn't take salary yet for. If
you are the ownly owner, its a mute point, you make your money back on the
profit of the sale (the difference between invested amount and sale price).
But what if selling for Stock or not selling and just taking on new
partners. Do you just give yourself a higher percentage of the stock to
account for it, or do you write up a loan to compensate for a reasonable
repayment of unpaid back salaries? Or is there a way to take a corporate
loss at a value equivellent to the unpaid salary? You got to be careful,
because you don't want to have to pay back income tax on salary that you
never received, because it was a salary that was documented as owed. These
are all tax questions that need addressing, at the appropriate time in ones
business evolution. My experience shows that once there are multiple
investors (outside of family), they need to be addressed.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: "Rick Smith" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>; "'WISPA General List'" <wireless@wispa.org>
Sent: Saturday, December 16, 2006 1:34 PM
Subject: RE: [WISPA] salary
of course, if you own an Scorp, you HAVE to have annual meetings with
minutes and post annual reports to the state. At least in NJ.
And, Tom's right. Repayment of loans is a nice way to not pay tax. NOW,
you can only do that if you've actually loaned the company things. But if
you're a "working" partner, you're loaning time to the company which needs
to be repaid at a certain rate. (so long as you don't claim expenses like
mileage and other reimbursements - then you HAVE to take a salary. can't
have the best of both worlds)
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On
Behalf Of Peter R.
Sent: Friday, December 15, 2006 9:34 AM
To: WISPA General List
Subject: Re: [WISPA] salary
Check with your CPA on that.
The IRS likes to see salary and other activities that represent that your
"company" really is a company and not a tax shelter so that you avoid the
sole proprietor tax schedule.
(It's called piercing the veil -- if you don't have minutes and annual
shareholder meetings and run it like a business, you lose the corporate
shield for tax purposes AND for liability as in civil litigation).
- Peter
Tom DeReggi wrote:
Zero. When the CEO is also the primary investor, and the company is
an S-corp or LLC, why pay payroll tax, when you can just take a
repayment of loan?
The salary of the CEO can be meaningless unless also disclosed wether
they have an equity position or not, and of what caliber.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
--
WISPA Wireless List: wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives: http://lists.wispa.org/pipermail/wireless/
--
WISPA Wireless List: wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives: http://lists.wispa.org/pipermail/wireless/
--
WISPA Wireless List: wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives: http://lists.wispa.org/pipermail/wireless/
