In October 2019,Jonathon Remodeling Co

question 85

Multiple Choice

In October 2019,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 2020.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 2019 and a bad debt deduction of $30,000 in 2020.
• C)$30,000 income in 2019 and a STCL of $30,000 in 2020 limited to $3,000 after netting.
• D)$30,000 income in 2019 and then must amend last year's return to show $0 income when advised of the bankruptcy.

---

Definitions:

Destroyed Without Compensation

Refers to a situation where property is damaged or destroyed without any form of restitution or payment to the owner.

Genetically Engineered

Organisms whose genetic material has been artificially manipulated in a laboratory through genetic modification technology.

Patent

A government-granted exclusive right to an inventor to make, use, and sell an invention for a certain number of years.

Collective Mark

A trademark or service mark used by members of a cooperative, association, or other collective group to indicate membership or to distinguish their goods or services from those of non-members.