Avigayil, who files as married filing jointly, owns all of the stock (i.e., 100%) of Avigayil Hats Corp. ("AH Corp."), a U.S. corporation that manufactures hats. In 2023, prior to the transactions after this paragraph, Avigayil had taxable income from investments other than AH Corp of $40,000, and AH Corp. had $500,000 of taxable income.

Which of the following 2023 payments from AH Corp. to Avigayil should result in the lowest 2023 combined income tax liability of AH Corp. and Avigayil?

Group of answer choices

Paying Avigayil $19,450 for services

Paying Avigayil $4,725 for services

Paying Avigayil $500,000 for services

Paying Avigayil a $500,000 dividend