Z Is a Ten-Percent (10%) Shareholder of H, Inc

Multiple Choice

Z is a ten-percent (10%) shareholder of H, Inc.H, Inc.has distributable net income of $100,000 this year and no accumulated earnings and profits.Z was paid $15,000 by the company for his expertise as a pilot, but he did not fly this year.How is the IRS likely to view the $15,000?

A) $15,000 salary to Z
B) $15,000 dividend
C) $10,000 dividend, $5,000 salary or return of capital
D) $7,500 salary, $7,500 dividend