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To the extent that the gross income from any property is derived from research activities excluded from the tax on unrelated business income by paragraph (7), (8), or (9) of section 512(b), such property shall not be treated as debt-financed property. Without a safe harbor or definitive guidance on what constitutes a reasonable salary, S corporations have resorted to various rules of thumb, such as a ratio of salary to distributions, net business income or gross receipts. Next, you need to worry about unrelated business income tax (UBIT). |
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