RMG CPA, LLC
299 Cherry Hill Road, Suite 203 Parsippany, NJ 07054
Cell: 973-886-7955 Tel.: 973-712-5000 Fax: 973-712-5011 e-mail: Rich@RMGNJ.com
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I see two possible issues:
1. If the company is an S corp, theoretically this could be considered a distribution as there is no work being done. If it is considered a distribution, it could be disproportionate to ownership, which is not allowed.2. Overall, if it is not work, and given, depending on the relatives relationship to the person who is granting the payment, it could be considered a gift.
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