Briefly discuss how the reasonable compensation issue, Ask an Expert

Accounting

To avoid double taxation on corporate income, shareholders in closely held C-corporations often pay themselves large salaries.

a. Briefly discuss how the reasonable compensation issue applies to S-corporations.

b. Briefly explain the double taxation problem and how paying large salaries to owners avoids it.

c. Briefly discuss the IRS's position on reasonable compensation for owner-employees of closely held C-corporations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9431763

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