Mutt Cutts Corporation is organized as a C-Corporation and was incorporated December 6, 1994…. 1 answer below »
SCENARIO: Mutt Cutts Corporation is organized as a C-Corporation and was incorporated December 6,
1994. The company was founded by two friends, Lloyd Christmas and Harry Dunne. Lloyd, a former
limousine driver, and Harry, a former dog groomer, decided to combine their expertise to start a mobile
dog grooming business. Lloyd and Harry are the only two shareholders of Mutt Cutts. The corporation
manufactures and services specialty mobile grooming vans for use by pet stores (NAICS code number
336100). The corporation has reported positive financial and taxable income since inception. The
company headquarters is located at 76 Queen Street, Charleston, South Carolina 29401. The company’s
employer identification number is 77-7777777, and the company uses a calendar year for tax purposes.
In 2019, Mutt Cutts changed its address from last year’s return. Mutt Cutts’ phone number is 843-718-
Lloyd J. Christmas (social security number 999-99-9999) is a 51 percent shareholder and president/CEO
of the company. Harry L. Dunne (social security number 888-88-8888) is a 49 percent shareholder and
vice president/CFO of the company. The other two officers of the company are: (1) COO: Mary H.
Swanson (social security number: 555-55-5555) and (2) Tax Director: Nicholas R. Andre (social security
number: 123-45-6789). The company does not have any preferred stock. The officer’s compensation for
2019 was as follows: (1) Lloyd: $200,000; (2) Harry: $200,000; (3) Mary: $140,000; and (4) Nicholas:
$260,000. You can assume that due to their expertise, all of these amounts meet the test of being both
ordinary and necessary as well as reasonable in amount (under IRC §162). All officers are U.S. citizens
and devote 100 percent of their time to the corporation.