Agnes Is the Sole Shareholder of Violet,Inc

question 10

Multiple Choice

Agnes is the sole shareholder of Violet,Inc.For 2011,she receives from Violet a salary of $200,000 and dividends of $100,000.Violet's taxable income for 2011 is $500,000.On audit,the IRS treats $50,000 of Agnes's salary as unreasonable.Which of the following statements is correct?

• A) Agnes's gross income will increase by $50,000 as a result of the IRS adjustment.
• B) Violet's taxable income will not be affected by the IRS adjustment.
• C) Agnes's gross income will decrease by $50,000 as a result of the IRS adjustment.
• D) Violet's taxable income will increase by $50,000 as a result of the IRS adjustment.
• E) None of the above is correct.

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Definitions:

Invisible Workers

Individuals whose contributions to the workforce or home are undervalued or overlooked, often due to societal, economic, or cultural factors.

Corporate Social Responsibility

A business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders.

Making the World

This term lacks clear definition without further context; it may refer to the process of shaping or influencing the world through actions, decisions, and practices.

Profits

The financial surplus remaining after all expenses have been deducted from total revenue, indicative of the financial health and success of a business.