Matt, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him a salary of $600,000 in the current year. The Tax Court has held that $200,000 represents unreasonable compensation. Matt must report a salary of $400,000 and a dividend of $200,000 on his individual tax return. True / False.

Explanation:

True  

When the payment of salary is not considered reasonable, the excess will be treated as dividend. Hence, Matt is a sole shareholder and is taxable for the dividends as well as salary.

a progressive tax is a tax that imposes a lower tax rate on low-income earners compared to those with a higher income, making it based on the taxpayer's ability to pay. that means it takes a bigger percentage from high income earners than it does from low income people.

the assumption the narrator makes in this excerpt is that the messages he heards were going to hurt the narrator's mom; the narrator just springs in to action. the narrator doesn't specify in this excerpt why he believes that the messages present a problem that requires protection.