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Unformatted text preview: use of corporate property 56,000 = constructive dividend + Gross income $56,000 (160 x $350) = decrease in E&P (160 x $350) "Excess" rent 20,000 (d) Rent Reasonable rent (9,000) Tom (d) $0 ($11,000 - $11,000) 11,000 = constructive dividend + Gross income $9,000 = decrease in E&P also 11,000 = decrease in rent expense = increase in taxable income = increase in E&P (c) Use of What if it was . Employee Net (decrease) to E&P plane Employee use of corporate property = additional compensation + Gross income (not shareholder/owner) = decrease in taxable income (included in W-2) = decrease in E&P Shareholder vs Employee use of corporate property ($250,000 x 7% x 9/12)...
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- Spring '08