Jason,an architect,is the sole shareholder of Purple Corporation,a PSC.The corporation paid Jason a salary of $180,000 during its fiscal year ending October 31,2008.How much salary must Purple pay Jason during the period November 1 through December 31,2008,to permit the corporation to continue to use its fiscal year without negative tax effects?
A)$0.
B)$20,000.
C)$30,000.
D)$60,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The salary for the deferral period (November and December)must be at least proportionate to the employee's salary received for the fiscal year.The amount that Purple Corporation must pay Jason during the period November 1 through December 31,2008,to permit the continued use of its fiscal year without negative tax effects is $30,000 ($180,000 F1F1F1S1F1F1F10 2/12).

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