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1374(a).1 Respondent determined that petitioner is liable for
tax under section 1374(a).
Petitioner realized capital gains of $929,915 in the year in
issue. That amount is $12,762 more than 50 percent of the amount
of petitioner's revised taxable income for the year in issue.
Petitioner seeks to increase its taxable income so that its
capital gains are less than 50 percent of its taxable income.
Thus, petitioner has adopted positions which, if successful,
would increase its taxable income. Petitioner contends (1) that
it paid unreasonable compensation to its officers during the year
at issue, and (2) that it improperly deducted bonuses it paid to
its officers in the year at issue (when petitioner declared the
bonuses) instead of the following year (when petitioner paid the
bonuses).
We must decide the following issues:
1. Whether reasonable compensation for petitioner's
officers for the year in issue is $618,295 as respondent contends
and as petitioner reported on its return, $421,938 as petitioner
contends, or some other amount. We hold that $618,295 is
reasonable.
2. Whether, as respondent contends, petitioner must have
respondent's consent to delay deductions for bonuses from the
1Section references are to the Internal Revenue Code in
effect for the year in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
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