Sue is 30 years old and is president and a 51% shareholder of C Corporation. She informs
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b. Can you think of any other potential sources of information that you might want to consider?
c. In addition to asking Sue questions, how else might you discover some of the pertinent facts?
d. Which of the preceding facts are relevant? Which are irrelevant?
e. Is it likely that you will need to ask more questions at a later point? Why or why not?
f. What is the first question you will try to answer in your research? When you discover that in order for a bonus to be deductible, the employee's salary plus bonus must be considered "reasonable?" In addition, you learn from your client that the company is an accrual basis taxpayer. How does your initial question change?
g. What is the taxpayer's desired result? Why is this important? How does it affect your role as tax advisor?
h. Is this a planning research type of situation? How do you know?
i. Sue tells you that she is considering paying a $100 bonus to each employee. Does
this affect the tax research?
j. Is it part of your responsibility to decide how much the bonuses should be? Why or why not? 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...
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