Juan, an attorney, is the sole shareholder of Carmine Corporation, a C corporation and professional association. The

Question:

Juan, an attorney, is the sole shareholder of Carmine Corporation, a C corporation and professional association. The corporation paid Juan a salary of $336,000 during its fiscal year ending September 30, 2015.

a. How much salary must Carmine pay Juan during the period October 1 through December 31, 2015, to permit the corporation to continue to use its fiscal year without negative tax effects?

b. Carmine Corporation had taxable income of $95,000 for the year ending September 30, 2015. Compute the corporation’s income tax liability for the year.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...