Canary Corporation,an Accrual Method C Corporation,uses the Calendar Year for Tax

question 6

Essay

Canary Corporation,an accrual method C corporation,uses the calendar year for tax purposes.Leticia,a cash method taxpayer,is both a shareholder of Canary and the corporation's CFO.On December 31,2012,Canary has accrued a $75,000 bonus to Leticia.Describe the tax consequences of the bonus to Canary and to Leticia under the following independent situations.

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Definitions:

Sensitive Locations

Defined as places considered to require special protection or respect because of their cultural, environmental, or historical significance.

Court Order

A formal statement from a court that requires a person or entity to do or not do specific actions.

Religious Beliefs

The faith or conviction in the doctrines of a religion, which often guide the moral and ethical decisions of its followers.

Public Schools

Schools that are funded and run by the government, providing free education to children in the community.