JKL Inc. and Matthew Inc. enter into a business transaction. The two corporations are related parties for tax purposes. Which of the following statements is true?
A) JKL and Matthew must account for the transaction using the same method of accounting.
B) The IRS has the right to reallocate income from the transaction to prevent distortion.
C) The cash method of accounting must be used to account for such transactions.
D) JKL and Matthew must request permission from the IRS to engage in the related party transaction.
Correct Answer:
Verified
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