IRS Reasonable Executive Compensation

Course Contents

1. Introduction
   - page 1
   • Overview
     - page 1
2. The Concept of Reasonable Compensation
   - page 2
   • Test 1: Reasonable
     - page 2
   • Test 2: For Services Rendered
     - page 2
   • Determining Reasonable Compensation
     - page 3
3. Proprietorships and Partnerships
   - page 4
   • Example 1: Black Mesa Products as Partnership
     - page 4
4. Limited Liability Company
   - page 5
5. S Corporation
   - page 6
   • Under-Compensation
     - page 6
   • Starting Out
     - page 7
   • Fringe Benefits
     - page 7
   • Example 2: Black Mesa Products as S Corp
     - page 7
   • Interactive Exercise #1
     - page 8
     • Your Turn
       - page 9
6. C Corporation
   - page 10
   • Dividends
     - page 10
     • Double Taxation
       - page 10
   • Fringe Benefits
     - page 10
   • Example 3: Black Mesa Products as C Corp
     - page 11
7. Criteria for Reasonable Compensation
   - page 12
   • Measuring "Reasonable Pay"
     - page 12
   • Starting Out
     - page 13
8. Intermediate Sanctions for Tax-Exempt Organizations
   - page 14
9. Maximum Reasonable Compensation
   - page 15
   • ERIXA Methodology
     - page 15
   • Interactive Exercise #2
     - page 16
     • Research results
       - page 17
     • Your turn
       - page 18
   • Tips for Being Perceived as Reasonable
     - page 19
   • Independent Investor Test
     - page 20
     • Exacto Springs vs. Commissioner
       - page 20
     • Return on equity
       - page 20
10. Business Valuation
    - page 21
11. Summary
    - page 22