Jason,an architect,is the sole shareholder of Purple Corporation,a personal service corporation.The corporation paid Jason a salary of $120,000 during its fiscal year ending November 30,2010.How much salary must Purple pay Jason during the period December 1 through December 31,2010,to permit the corporation to continue to use its fiscal year without negative tax effects?
A)$10,000.
B)$20,000.
C)$110,000.
D)$120,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The corporation must pay Jason a salary of $10,000 during the period December 1 through December 31, 2010, to permit the corporation to continue to use its fiscal year without negative tax effects. This is because the corporation's fiscal year ends on November 30, 2010, and the corporation must pay Jason a salary of at least $10,000 during the period December 1 through December 31, 2010, in order to avoid having to pay additional taxes.

Jason,an Architect,is the Sole Shareholder of Purple Corporation,a Personal Service