In October 2016,Jonathon Remodeling Co

question 73

Multiple Choice

In October 2016,Jonathon Remodeling Co. ,an accrual-method taxpayer,remodels and renovates an office building for Dale and bills him $30,000.Dale signs a note for the debt.Dale keeps delaying payment and files bankruptcy in 2017.Creditors are informed that no assets are available for payment.Jonathon Remodeling Co.will report

• A)$0 income in both years.
• B)$30,000 income in 2016 and a bad debt deduction of $30,000 in 2017.
• C)$30,000 income in 2016 and a STCL of $30,000 in 2017 limited to $3,000 after netting.
• D)$30,000 income in 2016 and then must amend last year's return to show $0 income when advised of the bankruptcy.

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Definitions:

Natural Selection

A mechanism of evolution where organisms better adapted to their environment tend to survive and reproduce more offspring.

Adopted Children

Individuals who have been legally taken into a family different from their birth family, becoming full members of the adoptive family with all the rights and responsibilities that entails.

Biological Parents

The individuals from whom a person inherits their genetic characteristics, typically referred to as the natural mother and father.

Adoptive Parents

Individuals who have legally taken on the responsibility of caring for a child that is not biologically theirs, providing parental care and support.