Saleh, an Accountant, Is the Sole Shareholder of Turquoise Corporation

question 85

Multiple Choice

Saleh, an accountant, is the sole shareholder of Turquoise Corporation, a C corporation. Turquoise is a personal service corporation with a fiscal year ending September 30 (pursuant to a § 444 election) . The corporation paid Saleh a salary of $330,000 during its fiscal year ending September 30, 2018. How much salary must Turquoise pay Saleh during the period October 1 through December 31, 2018, if the corporation is to continue to use its fiscal year without negative tax effects?

• A) $0
• B) $27,500
• C) $82,500
• D) $247,500
• E) None of the above

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Definitions:

Product Promotion

A marketing strategy aimed at increasing consumer awareness of a product or brand, generating sales, and creating brand loyalty.

Product Differentiation

The method of differentiating a product or service from competitors in the marketplace to increase its appeal to a specified target audience.

Monopolistically Competitive

A market structure in which many companies sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Economic Profits

Economic profits are the excess returns over the total costs, including both explicit and implicit costs.