Question
1. North Inc. is a calendar-year C corporation, accrual-basis taxpayer. At the end of year 1, North accrued and deducted the following bonuses for certain
1. North Inc. is a calendar-year C corporation, accrual-basis taxpayer. At the end of year 1, North accrued and deducted the following bonuses for certain employees for financial accounting purposes.
$10,750 for Lisa Tanaka, a 35 percent shareholder.
$19,900 for Jared Zabaski, a 20 percent shareholder.
$21,200 for Helen Talanian, a 15 percent shareholder.
$6,200 for Steve Nielson, a 10 percent shareholder.
Unless stated otherwise, assume these shareholders are unrelated.
How much of the accrued bonuses can North Inc. deduct in year 1 under the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.)
a. North paid the bonuses to the employees on March 1 of year 2.
Deductible accused bonuses:?
b. North paid the bonuses to the employees on April 1 of year 2.
Deductible accused bonuses: ?
c. North paid the bonuses to employees on March 1 of year 2 and Lisa and Jared are related to each other, so they are treated as owning each others stock in North.
Deductible accrued bonuses: ?
d. North paid the bonuses to employees on March 1 of year 2 and Lisa and Helen are related to each other, so they are treated as owning each others stock in North.
Deductible accrued bonuses: ?
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