Jorgensen High Tech Inc. is a calendar-year, accrual-method taxpayer. At the end of year 1, Jorgensen accrued and deducted the following bonuses for certain employees for financial accounting purposes.
• $40,000 for Ken.
• $30,000 for Jayne.
• $20,000 for Jill.
• $10,000 for Justin.
How much of the accrued bonuses can Jorgensen deduct in year 1 under the following alternative scenarios?
a. Jorgensen paid the bonuses to the employees on March 1 of year 2.
b. Jorgensen paid the bonuses to the employees on April 1 of year 2.
c. Jorgensen paid the bonuses to the employees on March 1 of year 2, and there is a requirement that the employee remain employed with Jorgensen on the payment date to receive the bonus.
d. Jorgensen paid the bonuses to employees on March 1 of year 2, and there is a requirement that the employee remain employed with Jorgensen on the payment date to receive the bonus, if not the forfeited bonus is re-allocated to the other employees.