Whether compensation paid to a corporate employee is reasonable is a question of fact to be determined
Question:
a. The employee owns no stock but is the mother-in-law of the sole shareholder.
b. The shareholder-employee does not have a college degree.
c. The shareholder-employee works 40 hours per week for another unrelated employer.
d. The shareholder-employee was underpaid for services during the formative period of the corporation.
e. The corporation has never paid a dividend.
f. Year-end bonuses are paid to all employees, but officer-shareholders receive disproportionately larger bonuses.
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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Related Book For
South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts
ISBN: 1389
41st Edition
Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
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