Conrolling shareholder-employee of southwest corporation

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Reference no: EM13749199

laura, the conrolling shareholder and an employee of southwest corporation, recives an anual salary of 750000. Based on several factors including the size of the corporation's operations and comparision of salary received by officers of comparably-size corporations, the IRS contends that Laura's salary should be no higher than $600000. The court upheld the IRS's position. As a result, which of the following is true?

a. $600,000 is deductible by the corporation; $750,000 is taxable to Laura

b. $750,000 is deductible by the corporation; $750,000 is taxable to Laura

c. $600,000 is deductible by the corporation; $600,000 is taxable to Laura

d. $750,000 is deductible by the corporation; $600,000 is taxable to Laura

Reference no: EM13749199

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