Alimony of $40,000 to Brad's former wife. Although Brad was personally obligated to make the...
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Alimony of $ to Brad's former wife. Although Brad was personally obligated to make the payments, he used corporation funds to make the payments. If this is deemed to be a constructive dividend, indicate how such a payment will be treated. A Yes. Since Brad is personally obligated to make the payments and his compensation is on the high end of normal limits this amount is a constructive dividend to Brad. B No The company can deduct the alimony payments as compensation to Brad since he is the owner
Alimony of $ to Brad's former wife. Although Brad was personally obligated to make the payments, he used corporation funds to make the payments. If this is deemed to be a constructive dividend, indicate how such a payment will be treated.
A
Yes. Since Brad is personally obligated to make the payments and his compensation is on the high end of normal limits this amount is a constructive dividend to Brad.
B
No The company can deduct the alimony payments as compensation to Brad since he is the owner
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