This year, publicly held Corporation DF paid its PFO a $1.4 million salary, only $1 million of

Question:

This year, publicly held Corporation DF paid its PFO a $1.4 million salary, only $1 million of which was deductible. It also accrued a $200,000 liability for deferred compensation payable in the year 2025 (when the PFO must retire). To what extent does either transaction result in a difference between DF’s book income and taxable income? Is the difference permanent or temporary?

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