McLin, Inc., is a calendar year S corporation. Its AAA balance is zero. a. McLin holds $90,000 of...

McLin, Inc., is a calendar year S corporation. Its AAA balance is zero.

a. McLin holds $90,000 of AEP. Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock. Determine the tax aspects if a $90,000 salary is paid to Tobias.

b. Same as part (a), except that McLin pays Tobias a $90,000 dividend from AEP.