In Applying the $1 Million Limit on Deducting Executive Compensation

question 144

Essay

In applying the $1 million limit on deducting executive compensation, what corporations are subject to the deduction limit? What executives are covered?

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Definitions:

Entrepreneurship

The act of creating, managing, and operating a business venture in order to gain profit, often characterized by risk-taking.

Act-Learn-Build

A process approach that emphasizes action-oriented learning and building iteratively on results to develop new products, services, or businesses.

Social Entrepreneurship

The pursuit of entrepreneurial ventures with a major emphasis on achieving social goals and positive externalities.

Not-For-Profit

A tax status granted to companies performing functions deemed by Congress to be socially desirable that exempts them from income tax and, in some cases, allows them to receive tax-deductible donations.