Question
Isaac was recruited to serve as the Chief Financial Officer (CFO) of Theta Corporation, a privately-owned company in the healthcare industry, effective March 1, 2022.
Isaac was recruited to serve as the Chief Financial Officer (CFO) of Theta Corporation, a privately-owned company in the healthcare industry, effective March 1, 2022. Throughout the fiscal year 2023, Theta Corporation compensated Isaac as follows:
- Base Salary: $1,400,000
- Performance Bonus: $300,000
- Restricted Stock Units (RSUs): Granted 8,000 RSUs with a fair market value of $75 per share at the time of grant.
Isaac's employment contract specifies that his bonus is contingent upon achieving specific financial performance metrics. The RSUs vest over a four-year period, with 25% vesting annually beginning on the grant date.
Determine the deductible portion of Isaac's compensation on Theta Corporation's 2023 corporate income tax return.
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