9 Matt, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him...
9
Matt, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him a salary of $600,000 in the current year. The Tax Court has held that $200,000 represents unreasonable compensation. Matt must report a salary of $400,000 and a dividend of $200,000 on his individual tax return.
True
False
Homework Answers
| True | ||
| When the payment of salary is not considered reasonable, the excess will be treated as dividend and Matt as a sole shareholder is taxable for the dividends as well as salary |
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9
Matt, the sole shareholder of Pastel Corporation (a C
corporation), has the corporation pay him...
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