Laura,the Controlling Shareholder and an Employee of Southtown Corporation,receives an Annual

Multiple Choice

Laura,the controlling shareholder and an employee of Southtown Corporation,receives an annual salary of $750,000.Based on several factors including the size of the corporation's operations and a comparison of salary received by officers of comparably sized corporations,the IRS contends that Laura's salary should be no higher than $600,000.The Court upheld the IRS's position.As a result,which of the following is true?

A) $600,000 is deductible by the corporation; $600,000 is taxable to Laura.
B) $600,000 is deductible by the corporation; $750,000 is taxable to Laura.
C) $750,000 is deductible by the corporation; $750,000 is taxable to Laura.
D) $750,000 is deductible by the corporation; $600,000 is taxable to Laura.