Tyrell Is the Sole Shareholder of Topaz, Inc

Multiple Choice

Tyrell is the sole shareholder of Topaz, Inc.Topaz's taxable income before the payment of Tyrell's salary is $250,000.Based on this, Tyrell has the corporation pay him a salary of $175,000 and a bonus of $75,000.A reasonable salary and bonus would be $200,000.Which of the following is correct?

A) The taxable income of Topaz, Inc., is $0 ($250,000 - $250,000 salary and bonuses) .
B) The taxable income of Topaz, Inc., is $75,000 ($250,000 - $175,000) .
C) Tyrell has salary and bonus income of $250,000.
D) Tyrell has salary and bonus income of $200,000 and dividend income of $50,000.
E) None of the above.