Mr.John Carre owns 67% of the stock of JC Inc.and is employed as the corporation's CEO.The corporation is a calendar year,accrual basis taxpayer.On December 14,2019,the board of directors authorized a $45,000 year-end bonus for Mr.Carre,which was paid to him on February 1,2020.In which year can JC Inc.deduct the bonus?
A) 2019.
B) 2020.
C) JC Inc.can deduct only $14,850 (33%) of the bonus in 2019.
D) The related party accrued expense is deductible in the year Mr.Carre includes the bonus payment in gross income.JC Inc.can never deduct the bonus.
Correct Answer:
Verified
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