sue is 30 years old and is president and a 51% sharehlder of c corporation. she infors you that C corporation has 10 shareholders, all unrelated. other than herself, no shareholder owns more than 10% of the company's stock. sue plans to recommend to the board of directors that it authorize the payment of a bonus to herself and three other company employees. she asks you, as the company's tax advisor, to counsel her on what the company needs to do so that the company can get a dedution for the planned bonus payments. After further discussions with Sue, you learn that the company's business is commerical real estate development. The company had net revnues last year totaling $15 million. The company is an accural basis taxpayer., and each of the inteded recipients employ the cash basis method of tax accounting. She would prefer the bonuses to actually be paid next year, but deducted by the company this year. One of the intended recipients is Sue's executive assistant, who is not currently a shareholder in the company. Sue would like the bonus to equal 100% of each of the recipients current salary. The current salaryies of the intedned recipients are as follows:

President $750,000

Executive assistant $150,000

CFO $450,000

VP of operations $375,000

The CFO and VP of operations are shareholders in the company, each owning 10% of stock.

Sue had indicated to you that she believes the annual salaries are comparable or, perhaps, alittle on the high side when comparred to her company's competitors. You also learn that the company regularly pays out dividends to shareholders and plans to contonitue to do so.

What are the issues at stake and how would you advise her?