Question
Paula is the sole shareholder of Violet, Inc. For 2019, she receives from Violet a salary of $300,000 and dividends of $100,000. Violet's taxable income
Paula is the sole shareholder of Violet, Inc. For 2019, she receives from Violet a salary of $300,000 and dividends of $100,000. Violet's taxable income for 2019 is $500,000. On audit, the IRS treats $100,000 of Paula's salary as unreasonable. Which of the following statements is correct?
a.Paula's gross income will decrease by $100,000 as a result of the IRS adjustment.
b.Paula's gross income will increase by $100,000 as a result of the IRS adjustment.
c.Violet's taxable income will decrease by $100,000 as a result of the IRS adjustment.
d.Violet's taxable income will not be affected by the IRS adjustment.
e.None of these choices are correct.
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Sampling Theory In The Auditing Of Nuclear Materials Accountancy Statistical Modeling Of Accountancy And Audit
Authors: Dictus
1st Edition
3844365427, 978-3844365429
