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Samantha is the president and sole shareholder of Toucan Corporation. She is paid an annual salary of $500,000, and her son, Aaron, the company’s chief financial officer, is paid a salary of $290,000. Aaron works for Toucan on a part-time basis and spends most of his time training for triathlons. Toucan advances $85,000 to Samantha as an interest-free loan. What are the tax issues?
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