Cash basis taxpayer

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On December 31, 2016, Larsen Corp., a calendar year, accrual method C corporation, accrues a bonus of $50,000 to its president (a cash basis taxpayer), who owns 60% of the corporation’s outstanding stock. The $50,000 bonus is paid to the president on February 1, 2017. For Larsen Corp.’s 2016 Form 1120, the $50,000 bonus will be a deduction item?

Reference no: EM131859454

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