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petitioner’s accrued liability for wages in a document entitled,
"Summit Sheet Metal Company, Inc. Accrued Wages”. Chasin entered
each officer's bonus on that document on September 30, 1987.
Petitioner paid the bonuses on December 15, 1987, by paying
Federal and State payroll taxes for its officers in the following
amounts: $75,000 for Chasin, $75,000 for Hanson, and $97,000 for
Searing.
4. Summary of Petitioner's Practices Relating to Bonuses
It Paid to Its Officers
Petitioner declared bonuses for its three officers near the
end of each of its fiscal years from 1966 to the year in issue
and paid the bonuses in the first 75 days following the end of
the fiscal year in which they were declared. Petitioner accrued
the deduction for the bonuses in the year the bonuses were
declared in its fiscal years from 1966 through 1987.2
D. Building Sale
Petitioner sold a building on May 1, 1985, and realized a
net capital gain of $1,160,069. Petitioner reported the gain
under the installment method. Petitioner received the final
2This fact is established for 1984 to 1987 by petitioner's
tax returns; for 1966 to 1983 we infer that petitioner's practice
was the same because petitioner's practice of declaring and
paying bonuses was consistent from 1966 to 1987, and because
neither party contends otherwise.
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