Double taxation on corporate income

Assignment Help Accounting Basics
Reference no: EM13153951

Shareholders in closely held C-corporations often pay themselves large salaries in order to avoid double taxation on corporate income.

a. Briefly explain the double taxation problem and how paying large salaries to owners avoids it.

b. Briefly discuss how the reasonable compensation issue applies to S-corporations.

c. Briefly discuss the IRS s position on reasonable compensation for owner-employees of closely held C-corporations.

Reference no: EM13153951

Questions Cloud

Which is the better investment based on risk aversion andwhy : Security A will yield a 6% return in one year. Security B will either yield a 3% return or a 9% return in one year with equal probability. Which is the better investment based on risk aversion and why?
What strategy will each player choose : What is player 2's maximin strategy? If the game were played with Player 1 moving first and player 2 moving second, using the backward induction method, what strategy will each player choose?
How monetary policy affects aggregate supply : How monetary policy affects aggregate supply and demand and inflation, explain exactly how a change in the federal funds rate can trigger all these reactions. Use at least 4 graphs. Do you think we are in a liquidity trap today? Why or why not?
Probability selected item from production will weigh less : What is the probability that a randomly selected item from the production will weigh at least 4.14 ounces (to 4 decimals)?
Double taxation on corporate income : Shareholders in closely held C-corporations often pay themselves large salaries in order to avoid double taxation on corporate income.
What will the new equilibrium price and quantity be : If a hurricane strikes Florida, and destroys 20 thousand pounds of oranges, what will the new equilibrium price and quantity be?
Null-alternative hypotheses of slope of true regression line : Formulate null and alternative hypotheses about the slope of the true regression line. State a two-sided alternative, and perform a significance test.
Fasb accounting standards codification : What is the FASB Accounting Standards Codification (FASB ASC)? What is the purpose of FASB ASC? How do you think it can be used to make better accounting decisions? Do these standards apply to fund accounting (non profit)?
What fiscal policies do you think caused the crisis : What fiscal policies do you think caused the crisis and what were the effects of the fiscal policies implemented in reaction to the crisis?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Determine the cost ratio

Determine the cost ratio (retail method) for T games and comics store if the cost of goods available for sale is $36,000 and the retail value of goods available for sale is $90,000

  Amount of cost of goods sold

Based on the information given above, what amount of cost of goods sold did ABC record in 2008?

  Balance under current liabilities

The transactions of part (a) create what balance under current liabilities in the 2006 balance sheet.

  Prepare journal entries for transactions and events

The following are selected transactions of Ricks Auto Part. Ricks prepares financial statements semi annually. Prepare journal entries for the above transactions and events.

  Instance from the manufacturing industry

Provide examples from the manufacturing industry of: a) a journal entry that would be recorded that impacts the balance sheet. b) a journal entry that would be recorded affecting the income statement.

  Record the transactions on page 8 of a general journal

Record the transactions on page 8 of a general journal. You can Omit descriptions. You can use any General Journal template or the one attached.

  Description of debits and credits

What are debits and credits? In your opinion, why do accountants debit asset accounts to increase them but credit liability accounts to increase them?

  Auditor use to develop expectations

How are analytical procedures used in an audit engagement? What premise underlies the use of analytical procedures in auditing? What sources of information can an auditor use to develop expectations? Provide examples. - Answer 100-150 words.

  Description of predetermined overhead rate

Calculate the predetermined overhead rate using direct labor costs as the allocation base. Calculate the predetermined overhead rate using machine hours as the allocation base. Which of the allocation bases is preferred? Why?

  Examine the legal liability as an accounting professional

Examine the legal liability an accounting professional has, including how a CPA is protected. Differentiate between fraud and negligence.

  Information on journal entries to record business

On Jan 1, 2002, Frost Company acquired all of TKK Corporation's assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Frost shares were selling at $22 per share. Historical cost and fair value balance shee..

  Is there any way the prosecution can nonetheless

What if state police regulations require that vehicles of persons taken into custody on the open road be impounded and subjected to a prescribed inventory inspection?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd