FREE STATUTORY WORKPAPER SIMULATOR
S-Corp Reasonable Compensation & Form 7203 4-Gate Basis Cascade
Simulate multi-hat officer wage benchmarks alongside the sequential four-gate loss limitation waterfall (§ 1366(d) Stock & Direct Debt Basis → § 465 At-Risk → § 469 Passive Activity → § 461(l) Excess Business Loss).
Workflow and statutory math simulation only. Not legal or tax advice.
Interactive Simulator
1. S-Corp Multi-Hat Reasonable Compensation & FICA Differential
Models time-allocation weighting across executive, production, and administrative roles against proposed Form W-2 officer wages and Form 1120-S distributions.
Weighted Market Composite Benchmark: $130,550 · Uncompensated Wage Gap: $34,550 · 15.3% FICA Recharacterization Differential: $5,286.15
2. Form 7203 Stock & Direct Debt Basis + 4-Gate Loss Cascade
Simulates the sequential four-hurdle ordering: Gate 1 (§ 1366(d) Stock + Direct Debt Basis) → Gate 2 (§ 465 At-Risk) → Gate 3 (§ 469 Passive Activity) → Gate 4 (§ 461(l) Excess Business Loss).
- Gate 1 — IRC § 1366(d) Form 7203 Basis Limit: Clears $63,500 · Suspended under § 1366(d): $21,500
- Gate 2 — IRC § 465 Form 6198 At-Risk Limit: Clears $55,000 · Suspended under § 465: $8,500
- Gate 3 — IRC § 469 Form 8582 Passive Activity Limit: Clears $55,000 · Suspended under § 469: $0
- Gate 4 — IRC § 461(l) Form 461 Excess Business Loss Limit: Net Current-Year Flow-Through Loss After All 4 Gates: $55,000
Related tools
IRC § 6672 Form 941 Trust Fund & Payment Designation Simulator →