B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On
Question:
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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The tax deduction rules for accrual basis taxpayers can be a bit complex especially when transaction...View the full answer
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Related Book For 
Income Tax Fundamentals 2017
ISBN: 9781305872738
35th Edition
Authors: Gerald E. Whittenburg, Steven Gill, Martha Altus Buller
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