After serving as an active director of Lee Corp. for twenty
years, Ryan was appointed an honorary director with the obligation
to attend directors’ meetings with no voting power. In 2012,
Ryan received an honorary director’s fee of $5,000. This fee is

Reportable by Lee as employee compensation subject
to social security tax.
Reportable by Ryan as self-employment income subject
to social security self-employment tax.
Taxable as “other income” by Ryan, not subject to any
social security tax.Considered to be a gift not subject to social security
self-employment or income tax.