Generally distributions might be recharacterized as compensation in cases where compensation isn't "reasonable", with no distribution there would be nothing to recharacterize. It seems to me that the DB contribution is an expense of the S-Corp, not a distribution to the shareholder, or at least it wouldn't be reported on K1 as such. Of course you might not want to be the test case for this theory.
On the other hand, knowing nothing about your business, $24.4k sounds quite low to be reasonable, and respectfully, if you set it there just for SS purposes, even less reasonable.
On the other hand, knowing nothing about your business, $24.4k sounds quite low to be reasonable, and respectfully, if you set it there just for SS purposes, even less reasonable.
Statistics: Posted by MP123 — Fri Jan 23, 2026 10:53 am — Replies 2 — Views 60