I assume you have 100% owner situation. If that is the case, no, not entirely unusual, and the owner can pretty much do what he wants to in that regard. May have a tax issue however. If the IRS were to audit, you may have a constructive dividend issue, if the company is a C corp. Obviously this is not a good thing from a company profitability and morale standpoint, particularly if you have folks that have incentives tied to company profitability.
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Good point on the ordinary and necessary issue. Could have a tax problem regardless of S Corp or C Corp.
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