qbteachmt
Level 15

"but wages per RCreport can be $6000 per month"

Can be.

No, that's not reasonable given the scenario you present, if they are only netting $4k annually. Establishing reasonableness will take into account the success or failure of being in business.

If the person working over 2,000 hours a year ends with $4k gross business profit, there would be no expectation of $6k a month wages. That's not reasonable.

A person spending 1,000 hours a year and paying themselves $4k payroll for the year and taking $60k as distribution would be violating reasonableness.

Facts and circumstances apply.

It's similar to the "hobby or not" conditions.

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