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:

Stealing

The act of taking someone else's property without permission or legal right and with no intention to return it.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing behaviors, thoughts, and emotions.

Reciprocal Determinism

A concept in psychology that suggests individual behavior, environment, and cognition are interrelated and influence each other.

Trait

A characteristic or quality of an organism, often inherited, that can be physical like height or behavioral like shyness.