Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 15, Problem 5AP
Mr. and Mrs. Soon are the sole shareholders of SW Inc. For the last three years, SW has employed their son as a sales representative and paid him a $30,000 annual salary. During a recent IRS audit, the revenue agent discovered that the son has never made a sale and spends most of his time playing saxophone in a jazz band. Determine the potential effect of this discovery on SW’s taxable income and on Mr. and Mrs. Soon’s taxable income under the following assumptions:
- a. SW Inc. is an S corporation.
- b. SW Inc. is a C corporation.
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Chapter 15 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
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