Question

My client is a 100 percent owner of an S corporation. For the past five years, the corporation netted $150,000 a year and my client took no salary and no distributions. He paid the taxes on the annual $150,000 of pass-through income from his personal funds.

He put the accumulated corporate cash into a corporate investment portfolio that’s worth about $780,000.

Now he’s retiring. The S corporation will have no business income going forward. My client plans to take $75,000 in distributions ... Log in to view full article.