Kirby, the Sole Shareholder of Falcon, Inc

question 95

Essay

Kirby, the sole shareholder of Falcon, Inc., leases a building to the corporation. The taxable income of the corporation for the tax year before deducting the lease payments is projected to be $500,000.
a. What are the tax consequences to Kirby and to Falcon if Kirby leases a building to the corporation for $400,000?
b. Is there a potential pitfall? How would it change the tax consequences to Kirby and to
Falcon?

---

Definitions:

Class Advocacy

Efforts or actions taken to support and defend the interests of a specific class or group of people, often in the context of social justice and rights.

Macro Skill

A broad, general skill area that encompasses complex capabilities, often used in contrast to more detailed, specific micro skills.

Macro Practice

Social work practice focused on large-scale social processes and institutions, seeking to implement systemic changes or interventions at the community, societal, or policy levels.

Media

Various means of communication, such as television, radio, newspapers, and the internet, used to disseminate information to a large audience.