Solutions to Chapter 4 Problems
(1) Ricardo includes the entire $3,900,000 ($325,000 x 12 months) in taxable income this year and his employer deducts the same. (2) If the contract provides for $900,000 in deferred compensation, Ricardo includes only $3,000,000 ($250,000 x 12 months) in income this year and is taxed on the $900,000 in the year he receives it. ................
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