Forward Corporation is owned by a group of 15 shareholders. During the current year, Forward pays $550,000 in salary and bonuses to Alvin, its president and controlling shareholder. The corporation's tax rate is 21%, and Alvin's marginal tax rate is 37% for ordinary income and 23.8% (20% + 3.8% on net investment income) for long-term capital gains. The IRS audits Forward's tax return and determines that reasonable compensation for Alvin is $350,000. Forward agrees to the adjustment. Read the requirement. The $ 200,000 in disallowed salary and bonuses will be nondeductible by Forward Corporation and taxable as a dividend Forward will to Alvin. its salary deduction for a tax of Alvin will