Question
Which of these shareholder-employees seems to be receiving reasonable compensation for their full-time position running the S corporation on a daily basis? a) Anu is
Which of these shareholder-employees seems to be receiving reasonable compensation for their full-time position running the S corporation on a daily basis? a) Anu is one of five shareholder-employees of Procol Harum, a clothing boutique formed as an S corporation, that makes $465,000 a year. She pays herself a salary of $15,000 for her full-time position running the company on a daily basis. b) Desna is the only shareholder-employee of Manatee Nail Salon, an S corporation that makes $245,000 a year. She paid herself a salary of $65,000, which is comparable to other employees in her field of work. c) Fiona is a shareholder-employee of Buskers Bagels, an S corporation, that makes $99,000 a year. She pays herself a salary of $6,600. d) Judee is a dermatologist who owns the Skin Tight Clinic, an S corporation, with three other shareholders. The clinic makes $995,000 a year. She pays herself a salary of $50,000. Comparable dermatologist salaries range from $260,000 to $470,000.
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