Kim is the sole shareholder and CEO of KimTech, Inc., a technology company valued at approximately $5,000,000. KimTech is a C corporation for federal…

Kim is the sole shareholder and CEO of KimTech, Inc., a technology company valued at approximately $5,000,000. KimTech is a C corporation for federal tax purposes. In 2007, KimTech had net pretax profits–before deducting Kim’s compensation–of $1,000,000. After deducting Kim’s base salary of $100,000 and bonus of $800,000, the company was left with a small after-tax profit, which was retained by KimTech (i.e., no dividends were paid to Kim). KimTech has two other officers, a CFO and a VP of Sales and Marketing, each of whom received salaries of $100,000 and no bonuses. Kim’s bonus was awarded by the board of directors, which consists of three directors: Kim, who serves as Chairman, the CFO and the VP of Sales and Marketing. In determining Kim’s bonus, the board multiplied pretax profits, before Kim’s compensation, by 80% (i.e., $1,000,000 x .8 = $800,000 bonus). In recent years, KimTech’s value has been appreciating at 7% per year. Please the second part of the question is on the way Read more: http://www.justanswer.com/questions/1lvns-kim-is-the-sole-shareholder-and-ceo-of-kimtech-inc-a-technology#ixzz0qVmIDnRC

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