Zorn conducted his professional practice through Zorn, Inc. The corporation uses a fiscal year ending September 30

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Zorn conducted his professional practice through Zorn, Inc. The corporation uses a fiscal year ending September 30 even though the business purpose test for a fiscal year cannot be satisfied. For the year ending September 30, 2016, the corporation paid Zorn a salary of $180,000, and during the period January through September 2016, the corporation paid him a salary of $150,000.
a. How much salary should Zorn receive during the period October 1 through December 31, 2016?
b. Assume that Zorn received only $24,000 salary during the period October 1 through December 31, 2016. What would be the consequences to Zorn, Inc.?
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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South Western Federal Taxation 2017 Comprehensive

ISBN: 9781305874169

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

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