Bart Owns 100% of the Stock of Octo Corporation,which Uses

question 56

Multiple Choice

Bart owns 100% of the stock of Octo Corporation,which uses the accrual method.Bart's sister Samantha,a cash method taxpayer,did some advertising work for Octo in November 2015.In December,Octo received a billing statement from Samantha for $5,000 and paid Samantha the $5,000 in January 2016.Samantha is a calendar year taxpayer.When may Octo deduct the $5,000?

• A)2015
• B)2016
• C)Either 2015 or 2016
• D)The expense is not deductible since Samantha is Bart's sister.

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Definitions:

Density

Density is a measure of mass per unit of volume, often used to describe how compact or concentrated a substance is.

Volume

The amount of space an object or substance occupies, measured in cubic units.

Material

The matter from which a thing is or can be made, often categorized by properties such as strength, elasticity, and conductivity.

Chemical Sample

A portion or quantity of a substance taken for analysis or testing to understand its composition, purity, or other properties.