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Complete each section's statement based on the scenario provided. a. The employee owns no stock but is the mother-in-law of the sole shareholder. The determination
Complete each section's statement based on the scenario provided. a. The employee owns no stock but is the mother-in-law of the sole shareholder. The determination of the reasonableness of compensation paid to an employee who is not a shareholder but is related to the sole owner of the corporate-employer made in the same manner as that for a shareholder-employee. b. The shareholder-employee does not have a college degree. That the employee-shareholder does not have a college degree should be relevant only with respect to the c. The shareholder-employee works 40 hours per week for another unrelated employer. If the shareholder-employee works 40 hours per week for another unrelated employer, the salary is likely to be considered d. The shareholder-employee was underpaid for services during the formative period of the corporation. If the shareholder-employee was underpaid for services during the formative period of the corporation, of the current salary could be for service rendered in years. e. The corporation has never paid a dividend. If the corporation has never paid a dividend, it is found. likely that a constructive dividend may be f. Year-end bonuses are paid to all employees, but officer-shareholders receive disproportionately larger bonuses. The shareholder-employees vulnerable to constructive dividend treatment
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