S-Corporation shareholders are required to take "reasonable compensation" from the business. Some shareholders' have determined that compensation in order beat the FICA tax game. Now with the TCJA of 2017 that compensation will impact their QBID and may inadvertently encourage them to determine the compensation based on that.

A.What does this mean? Give example

B. Using information in the research problem #2;

Research Problem #2:

Sean Moon is president, secretary, treasurer, sole director, and sole shareholder of Streetx, an S corporation real estate company; He manages all aspects of the company's operations, and he is the only person working at the company that holds a real estate broker's license. Sean works 12-hour days and takes few days off. streetz's gross receipts and net income figures were reported as follows.

Year	Gross Receipts	Net Income
1	$376,453	$122,605
2	405,244	161,660
3	518,189	231,454

Sean and his wife, Kim, filed joint Federal income tax returns, but they did not report any wages or salaries on line 7 of their Forms 1040. During year 3, Moon transferred $240,000 from the S corporation to his personal account. What items would you use to support your understanding of this issue?

C. Why do accountants need to make sure they clearly understand the consequences?

D. Provide the pitfalls your S-Corp shareholder clients need to be aware of.