Arthur is the sole shareholder of Purple, Inc Purple 's taxable income before the payment of Arthur 's salary is $300,000 Based on this information, Arthur has the corporation pay him a salary of $200,000 and a bonus of $100,000 A reasonable salary and bonus would be $175,000 Which of the following...

Arthur is the sole shareholder of Purple, Inc. Purple's taxable income before the payment of Arthur's salary

Question:

Arthur is the sole shareholder of Purple, Inc. Purple's taxable income before the payment of Arthur's salary is $300,000. Based on this information, Arthur has the pay him a salary of $200,000 and a bonus of $100,000. A reasonable salary and bonus would be $175,000. Which of the following is correct?
a. The taxable income of Purple, Inc., is $0 ($300,000 - $300,000 salary and bonus).
b. The taxable income of Purple, Inc., is $100,000 ($300,000 - $200,000).
c. Arthur has salary and bonus income of $300,000.
d. Arthur has salary and bonus income of $175,000 and income of $125,000.
e. None of the above.
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