I am attempting to work through a scenario which involves an S-Corp with 2% shareholder’s (h&w) who do not take a salary but are paid through their wholly owned C corp which receives management fees from the S Corp. (sorry for the convoluted explanation). To add to the confusion both S and C are on fiscal year end (S=10/31 and C=09/30).
I thought I read the salary paid by the C corp would need to be deducted from the S corp net income for QBID calculation purposes. Based on my understanding the S Corp income and the salary would need to be prorated to include only 2018.