Homer Currently Operates a Successful S Corporation

Homer currently operates a successful S corporation. He would like to bring his two teenage children into the business. If he gives each child 10% of the stock, which of the following statements is true?

A) Since the children did not pay for the stock, Homer will still be taxed on the full income of the corporation under the assignment of income doctrine.
B) Homer must receive a reasonable salary for any time he spends working on behalf of the business.
C) Both statements are true.
D) Neither statement is true.