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

question 122

Multiple Choice

Laura,the controlling shareholder and an employee of Southwest 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:

Liver Size

Refers to the physical dimensions of the liver, an important measure in assessing liver health and detecting abnormalities.

Auscultation

The practice of using a stethoscope to hear the noises produced by the body's internal organs as part of diagnosing health issues.

Bowel Sounds

Noises made by the movement of the intestines, which can be heard during a physical examination and indicate the functioning of the gastrointestinal system.

Vascular Sounds

Sounds made by the blood circulating through the arteries and veins, often assessed using a stethoscope to detect abnormalities.