Of course, since the rabbi's employer was a tax-exempt organization, deferring
the employer's deduction and causing the taxation to it of the earnings was of no practical consequence.
1034(g) consent (because she had changed husbands), only one-half of the purchase price of the new residence counted for purposes of deferring
her gain on the former residence.
The employee could take full salary (without deferring
anything) and receive a $12,977 raise ($2,000 for the match plus $10,977--or roughly 150% of the amount of deferral not made) and the employer would be no worse off.
As a result of deferring
X's bonus, CHC reduces its year-end Federal tax outlay by $11,320 ($17,320 - $6,000) and both defers and lessens the FICA tax impact of the bonus.