Question
Eleanor was appointed as the Chief Operating Officer (COO) of Zeta Corporation, a privately-owned company in the technology sector, effective January 1, 2022. Throughout the
Eleanor was appointed as the Chief Operating Officer (COO) of Zeta Corporation, a privately-owned company in the technology sector, effective January 1, 2022. Throughout the fiscal year 2023, Zeta Corporation compensated Eleanor with the following:
- Base Salary: $1,000,000
- Performance Bonus: $150,000
- Stock Options: Granted 5,000 stock options with an exercise price of $55 per share at the time of grant.
Eleanor's employment contract specifies that her bonus is contingent upon achieving specific operational efficiency goals. The stock options vest over a five-year period, with 20% vesting annually beginning on the grant date.
Determine the deductible portion of Eleanor's compensation on Zeta Corporation's 2023 corporate income tax return.
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