- 13 - giving him for that year a total bonus of $54,027.2 As indicated previously, Mrs. Martin received a $33,060 "bonus" for 1990. This "bonus" was not determined pursuant to any fixed bonus formula.3 Petitioner's annual financial statements for its fiscal years from July 1, 1980, through June 30, 1990, reflect the following annual gross receipts and net profit or net loss after taxes: Net Profit 0r (Net Loss) FYE JUNE 30 Gross Receipts After Taxes 1981 $313,131 $38,482 1982 688,887 77,435 1983 954,902 66,425 1984 2,178,100 264,330 1985 2,692,567 184,821 1986 3,049,560 148,154 1987 3,545,513 179,645 1988 4,821,650 376,062 1989 4,581,509 382,755 1990 4,346,972 (98,639) Its annual financial statements for this period further reflect the following total assets and net assets: 2Mike's $54,027 total bonus consisted of (1) the $10,000 regular bonus he earned under the bonus formula petitioner had adopted for him in 1988, and (2) the $44,027 special bonus he received "in recognition of his contribution to the manufacturing operations of the corporation." Neither the regular nor the special bonus to Mike was challenged by respondent. 3In the notice of deficiency issued to petitioner, respondent originally determined that no portion of petitioner's $53,660 of purported total compensation to Mrs. Martin for its fiscal year ended June 30, 1990, was deductible as reasonable compensation. As a result of a settlement concluded between the parties, they now agree that half of this $53,660 (which includes the $33,060 "bonus" to her) is deductible by petitioner.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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