Bulldog Corporation reported taxable income of $585,000 this year, before any deduction for any payment to its sole shareholder and employee, Rojas. Bulldog chose to pay a bonus of $132,000 to Rojas.
What impact will Rojas's bonus have on Bulldog Corporation's taxable income?
a) Increase taxable income to $717,000
b) Decrease taxable income to $453,000
c) No impact on taxable income
d) Insufficient information to determine