1. Nancy is a 100% shareholder and president of Robin Corporation, a calendar year C corporation. The board of directors of Robin Corp has decided to pay Nancy a $250,000 bonus on top of her regular salary of $750,000 for the current year, based on her outstanding performance.

The independent directors of the Corp want to pay the $250,000 as salary, but Nancy would prefer to have it paid as a $250,000 qualified dividend. If Nancy is in the 37% marginal tax bracket irrespective of the treatment of the bonus, discuss which form of payment would be most beneficial from the tax perspective for EACH party - Nancy and Robin Corporation (Ignore any employment tax considerations.)