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:

Family Violence

Acts of physical, sexual, or emotional abuse among members of a household, typically involving spouses or partners.

Domestic Violence

Physical, emotional, or psychological abuse within a household, often between intimate partners or family members.

Family Members

Individuals related by blood, marriage, or adoption who share a common domicile or are part of the same immediate social unit.

Mistreat

To treat someone or something badly, with cruelty or negligence.