Robbie is the vice president of Mailer Corporation. He owns 40% of Mailer, which is organized as an S corporation. Robbie’s salary is $75,000, and he receives group-term life insurance and health and accident insurance that costs $3,000. Mailer’s operating income without considering any payments or benefits that Robbie receives is $180,000.
Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.