Answer to Question #57912 in Accounting for Bob
Included in the calculation of net income was a fee of $4,000 that was paid to Linda's 16 year old son for creating and maintaining a website for the company. In pricing the work, Viola found that it would cost at least $8,000 to obtain equivalent services from an outside consultant.
What effect would this have if any on calculating the minimum net income for Viola Morton's tax return for the year? (Essentially is this handled differently for tax purposes vs. accounting? Should it be deducted, added, or does it have no effect on net income for tax purposes?)
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