B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....

Question

Question

B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 20x1, the cor

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

The correct answer should be Option C - $0

Notes

Since the tax payer follows cash basis and no cash is being exchanged no deduction can be claimed in the tax return

Add a comment

Answer 2

Similar Homework Help Questions

Kalvin, a cash basis taxpayer, is a 75% owner and president of Falcon Fish Market. Falcon,...

Kalvin, a cash basis taxpayer, is a 75% owner and president of Falcon Fish Market. Falcon, an S corporation, uses the accrual method of accounting. On December 28, 2019, Falcon accrues a bonus of $40,000 to Kalvin. The bonus is payable on February 1, 2020. When is the bonus deductible? How would your answer change if Falcon is a cash basis taxpayer?
13) A taxpayer may use a cash basis for one business and an accrual basis for...

13) A taxpayer may use a cash basis for one business and an accrual basis for another business. True or False 14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year in which the loan is repaid. True or False 15) In general, a CPA on the cash basis method will never have a bad debt deduction. True or False 16) A cash-basis taxpayer may deduct prepaid business expenses currently regardless of the period...
On December 31, 2019, Flamingo, Inc., a calendar year accrual method corporation, accrues a bonus of...

On December 31, 2019, Flamingo, Inc., a calendar year accrual method corporation, accrues a bonus of $50,000 to its president a cash basis taxpayer) who owns 75% of the corporation's outstanding stock. The $50,000 bonus is paid to the president on February 4, 2020, For Flamingo's 2019 Form 1120, the $50,000 bonus will be a subtraction item on Schedule M.

TUULI (LU. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a...

TUULI (LU. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Troy is a full-time employee of the corporation and receives a salary of $60,000 per year. He also receives a bonus equal to 10% of all collections from clients he serviced during the year (which he receives in January of the following year). Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31,...
[Q1-3] North Inc. is a calendar-year C corporation, accrual-basis taxpayer. At the end of year 1,...

[Q1-3] North Inc. is a calendar-year C corporation, accrual-basis taxpayer. At the end of year 1, North accrued and deducted the following bonuses for certain employees for financial accounting purposes. $9,950 for Lisa Tanaka, a 20 percent shareholder. $12,400 for Jared Zabaski, a 40 percent shareholder. $19,000 for Helen Talanian, a 30 percent shareholder. $9,900 for Steve Nielson, a 0 percent shareholder. Unless stated otherwise, assume these shareholders are unrelated. How much of the accrued bonuses can North Inc. deduct...
Reed Corporation, an accrual basis taxpayer, reports the following results for the current year: Income: $...

Reed Corporation, an accrual basis taxpayer, reports the following results for the current year: Income: $ 290,000 16,000 5,000 9,000 140,000 4,000 Gross profit from manufacturing operations Dividends received from 25%-owned domestic corporation Interest income: Corporate bonds Municipal bonds Proceeds from life insurance policy on key employee Section 1231 gain on sale of land Expenses: Administrative expenses Bad debts Depreciation: 100,000 7,000 70,000 82,000 34,000 46,000 13,000 4,000 2,000 34,100 300 Financial accounting Taxable income Alternative depreciation system (for E...

LO.S Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks...

LO.S Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks you to prepare Schedule M-1 for 2018. $268,200 Net income per books (after-tax) Federal income tax per books Tax-exempt interest income Life insurance proceeds received as a result of death of corporate president Interest on loan to purchase tax-exempt bonds Excess of capital loss over capital gains Premiums paid on life insurance policy on life of Emerald's president 31,500 15,000 150,000 1,500 6,000 7,800
On Dec. 15, 2019, Julia’s Service Station, an accrual-method taxpayer, prepaid $4,000 worth of deductible interest...

On Dec. 15, 2019, Julia’s Service Station, an accrual-method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest won’t accrue until 2020.Julia’s Service Station will be displaying for the first time at a trade show in July 2020. On Dec. 16, 2019, Julia’s prepaid the $8,000 trade show booth rental expense. The paymentisn’t due until May 2020, and use of the booth will occur in July 2020.In addition, On Dec. 28, 2019, Ed’s Equipment repaired some...
GO CarCUSU Problem 4-41 (LO. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle...

GO CarCUSU Problem 4-41 (LO. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Troy is a full-time employee of the corporation and receives a salary of $60,000 per year. He also receives a bonus equal to 10% of all collections from clients he serviced during the yea (which he receives in January of the following year). Determine the tax consequences of the following events to the corporation and to Troy: a....

B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....

Homework Answers

Add Answer to:
B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....

Post as a guest

Earn Coins

Kalvin, a cash basis taxpayer, is a 75% owner and president of Falcon Fish Market. Falcon,...

13) A taxpayer may use a cash basis for one business and an accrual basis for...

On December 31, 2019, Flamingo, Inc., a calendar year accrual method corporation, accrues a bonus of...

TUULI (LU. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a...

[Q1-3] North Inc. is a calendar-year C corporation, accrual-basis taxpayer. At the end of year 1,...

Reed Corporation, an accrual basis taxpayer, reports the following results for the current year: Income: $...

LO.S Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks...

On Dec. 15, 2019, Julia’s Service Station, an accrual-method taxpayer, prepaid $4,000 worth of deductible interest...

GO CarCUSU Problem 4-41 (LO. 2, 3) Troy, a cash basis taxpayer, is employed by Eagle...

B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....

Homework Answers

Add Answer to: B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....

Post as a guest

Earn Coins

Add Answer to:
B Corporation, an accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer....