Which of the following factors would not be considered in determining if compensation paid to a shareholder/employee is reasonable?
A) The individual's duties and responsibilities.
B) What individuals performing in comparable capacities at other companies are paid.
C) Whether the corporation has a formal compensation policy.
D) The individual's marginal income tax rate.

Question

Quizplus · Accepted Answer

The individual's marginal income tax rate would not be considered in determining if compensation paid to a shareholder/employee is reasonable. Factors such as the individual's duties and responsibilities, what individuals performing in comparable capacities at other companies are paid, and whether the corporation has a formal compensation policy are all relevant in determining reasonable compensation.

Which of the Following Factors Would Not Be Considered in Determining