4. How is paying a salary to an employee-shareholder an effective way to mitigate the double taxation of corporate income?

5. When a corporation pays salary to a shareholder-employee beyond what is considered to be reasonable compensation, how is the salary in excess of what is reasonable treated for tax purposes? Is it subject to double taxation? [Hint: See Reg. 1.162-7(b)(1).]

6. How many levels of taxation apply to corporate earnings paid out as qualified fringe benefits? Explain.

7. When a C corporation reports a loss for the year, can shareholders use the loss to offset their personal income? Why or why not?