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Amos, a Shareholder-Employee of Pigeon, Inc

Question 41

True/False

Amos, a shareholder-employee of Pigeon, Inc., receives a $400,000 salary.The IRS classifies $125,000 of this amount as unreasonable compensation.The effect of this reclassification is to decrease Amos' gross income by $125,000 and increase Pigeon's gross income by $125,000.

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