When James retired as managing partner of “James and Jerry, CPAs,” he was entitled to a retirement annuity of $75,000 per year until he died. Is this arrangement allowed by the California Accountancy Act? Why or why not?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 24CE
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When James retired as managing partner of “James and Jerry, CPAs,” he was entitled to a retirement annuity of $75,000 per year until he died.

Is this arrangement allowed by the California Accountancy Act?

Why or why not?

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