Purple Corporation, a Personal Service Corporation (PSC), Adopted a Fiscal

Purple Corporation, a personal service corporation (PSC) , adopted a fiscal year ending September 30. The sole shareholder of the corporation is a calendar year taxpayer. During the fiscal year ending September 30, 2018, the shareholder-employee received $120,000 salary. The corporation paid the shareholder-employee a salary of $15,000 during the period beginning October 1, 2018 through December 31, 2018.

A) The corporation salary expense for the fiscal year ending September 30, 2019 is limited to $120,000.
B) The corporation salary expense for the fiscal year ending September 30, 2019 is limited to $135,000.
C) The corporation salary expense for the fiscal year ending September 30, 2019 is limited to $60,000.
D) The corporation must switch to a calendar year.
E) None of the above.