Laura,the Controlling Shareholder and an Employee of Southtown Corporation,receives an Annual

question 93

Multiple Choice

Laura,the controlling shareholder and an employee of Southtown Corporation,receives an annual salary of $750,000.Based on several factors including the size of the corporation's operations and a comparison of salary received by officers of comparably sized corporations,the IRS contends that Laura's salary should be no higher than $600,000.The Court upheld the IRS's position.As a result,which of the following is true?

• A)$600,000 is deductible by the corporation; $600,000 is taxable to Laura.
• B)$600,000 is deductible by the corporation; $750,000 is taxable to Laura.
• C)$750,000 is deductible by the corporation; $750,000 is taxable to Laura.
• D)$750,000 is deductible by the corporation; $600,000 is taxable to Laura.

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Definitions:

LMX

Leader-Member Exchange, a theory emphasizing the dynamic relationships between leaders and their team members, focusing on how these relationships influence organizational outcomes.

Authentic Leadership

A positive form of leadership that involves being true to oneself.

Self-Awareness

The conscious knowledge of one’s own character, feelings, motives, and desires, essential for personal development and growth.

LMX

Leader-Member Exchange, a theory focusing on the dyadic relationships between leaders and followers, emphasizing the quality of these interactions.