For your initial posting to this week's discussion, discuss whether the circumstances or statements are true or false, and explain your reasoning in the following two cases

1. Individual S is the sole shareholder of Corporation Y. The corporation employs S’s college-aged granddaughter as secretary treasurer for the summer, paying her $25,000 for 3 months of work. If the Internal Revenue Service determines that the granddaughter is not a bona fide corporate employee and disallows the entire $25,000 salary deduction, the $25,000 payment could be reclassified as a dividend to the granddaughter
2. Taxpayer T would like to shift some of his current year taxable income to an elderly aunt. T can accomplish this objective through the use of a $150,000 interest-free demand loan to his aunt.

Answer rating: 100% (QA)

1 TRUE The standard deduction is available up to Rs 50000 in a financial year However you can claim ... View the full answer