Patrick, an Attorney, Is the Sole Shareholder of Gander Corporation

question 52

Multiple Choice

Patrick, an attorney, is the sole shareholder of Gander Corporation, a C corporation. Gander is a personal service corporation with a fiscal year ending November 30 (pursuant to a § 444 election) . The corporation paid Patrick a salary of $180,000 during its fiscal year ending November 30, 2019. How much salary must Gander pay Patrick during the period December 1 through December 31, 2019, to permit the corporation to continue to use its fiscal year without negative tax effects?

• A) $0
• B) $30,000
• C) $165,000
• D) $180,000
• E) None of these

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Definitions:

Gantt Chart

A visual tool for project planning that displays activities against time, often used for tracking project schedules.

Total Float

The amount of time that a project task can be delayed without causing a delay to the project's overall completion date.

Binomial Probability

The probability of obtaining a given number of successes in a fixed number of binary trials, where each trial has two possible outcomes.

Continuity Correction

An adjustment made to a discrete distribution when approximating it by a continuous distribution, often used in binomial to normal distribution approximations.