The IRS Agent Who Audited the Form 1120 Filed by Alano

question 21

Multiple Choice

The IRS agent who audited the Form 1120 filed by Alano Inc. concluded that $300,000 of the salary that Alano paid to its CEO and sole shareholder was a constructive dividend. As a result:

• A) The CEO/shareholder's taxable income increases by $300,000.
• B) Alano must distribute an additional $300,000 cash to the CEO/shareholder
• C) Alano must distribute an additional $300,000 cash to the CEO/shareholder.
• D) Alano's taxable income increases by $300,000.

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Definitions:

Innocent Partakers

Individuals who are unintentionally involved in or affected by actions or decisions made by others, often without having a direct role or guilt in the situation.

Cybersex

Virtual sexual encounters or experiences that occur through the use of the Internet, often involving communication with others via text, imagery, or video.

Marital Problems

Issues and conflicts arising within a marriage that may affect the relationship's stability and satisfaction levels of the partners.

Strong Sexual Fantasies

Intense imaginative thoughts and desires about sexual activities.