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How much can b corporation deduct

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Reference no: EM132834143

Problem 1: B Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 2020, 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 February 1, 2021; the interest is not paid until 2022. How much can B Corporation deduct on its 2020 tax return for these two expenses?

a. $15,000
b. $0
c. $4,000
d. $19,000
e. $12,000

Reference no: EM132834143

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