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11 December, 18:33

Aaron, a shareholder-employee of Pigeon, Inc., receives a $300,000 salary. The IRS classifies $100,000 of this amount as unreasonable compensation. The effect of this reclassification is to decrease Aaron's gross income by $100,000 and increase Pigeon's gross income by $100,000

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  1. 11 December, 20:36
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    Answer: Incomplete question.

    True or False

    Answer is False

    Explanation: from the above question, The IRS reclassifies $100,000 of Aaron's salary as unreasonable compensation will increase Pigeon's net income by $100,000 and increase the dividend payable by $100,000 but will not affect the gross profit of the company while Aarons gross income will decrease by $100,000
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Home » Business » Aaron, a shareholder-employee of Pigeon, Inc., receives a $300,000 salary. The IRS classifies $100,000 of this amount as unreasonable compensation.
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