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B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 20X1,

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B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 20X1, the corporation accrues interest of $4,000 on a loan from Bonnie and also accrues a $15,000 bonus to Bonnie. The bonus is paid to Bonnie on March 1, 20X2; the interest is not paid until 20X3. How much can B Corporation deduct on its 20X1 tax return?

a. $0
b. $4,000
c. $15,000
d. $19,000
e. $12,000

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Income Tax Fundamentals 2017

Income Tax Fundamentals 2017

ISBN: 9781305872738

35th Edition

Authors: Gerald E. Whittenburg, Steven Gill, Martha Altus Buller

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Question Posted: August 28, 2023 05:46:49
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