Only if there are distributions so if you are losing money or breaking even (by the IRS definition of that) you won't be paying any taxes:
IRS: "The amount of the compensation will never exceed the amount received by the shareholder either directly or indirectly. "
Parent says: "pay yourself a market rate salary."
IRS:
"There are no specific guidelines for reasonable compensation in the Code or the Regulations."
http://www.irs.gov/newsroom/article/0,,id=200293,00.html
The point I am clearing up is the issue of "having to pay yourself a market rate salary" which only comes into play if you are making enough to pay anything.
Only if there are distributions so if you are losing money or breaking even (by the IRS definition of that) you won't be paying any taxes:
IRS: "The amount of the compensation will never exceed the amount received by the shareholder either directly or indirectly. "
Parent says: "pay yourself a market rate salary."
IRS:
"There are no specific guidelines for reasonable compensation in the Code or the Regulations."
http://www.irs.gov/newsroom/article/0,,id=200293,00.html
The point I am clearing up is the issue of "having to pay yourself a market rate salary" which only comes into play if you are making enough to pay anything.