[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.162-9]

[Page 781]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.162-9  Bonuses to employees.

    Bonuses to employees will constitute allowable deductions from gross 
income when such payments are made in good faith and as additional 
compensation for the services actually rendered by the employees, 
provided such payments, when added to the stipulated salaries, do not 
exceed a reasonable compensation for the services rendered. It is 
immaterial whether such bonuses are paid in cash or in kind or partly in 
cash and partly in kind. Donations made to employees and others, which 
do not have in them the element of compensation or which are in excess 
of reasonable compensation for services, are not deductible from gross 
income.