Question
Lucas was recruited to serve as the Chief Financial Officer (CFO) of Alpha Corporation, a publicly-traded company in the healthcare sector, effective March 1, 2022.
Lucas was recruited to serve as the Chief Financial Officer (CFO) of Alpha Corporation, a publicly-traded company in the healthcare sector, effective March 1, 2022. For the fiscal year 2023, Alpha Corporation compensated Lucas as follows:
- Base Salary: $1,300,000
- Performance Bonus: $250,000
- Stock Grants: Received 8,000 shares of restricted stock with a fair market value of $70 per share at the grant date.
Lucas's employment contract outlines that his bonus is contingent upon achieving specific financial performance metrics. The restricted stock vests over a four-year period, with 25% vesting annually beginning on the grant date.
Calculate the deductible portion of Lucas's compensation on Alpha Corporation's 2023 corporate income tax return.
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