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

question 95

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 2019.In December,Octo received a billing statement from Samantha for $5,000 and paid Samantha the $5,000 in January 2020.Samantha is a calendar-year taxpayer.When may Octo deduct the $5,000?

• A)2019
• B)2020
• C)Either 2019 or 2020
• D)The expense is not deductible since Samantha is Bart's sister.

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Definitions:

Photosynthetic

Relating to the process by which green plants and certain other organisms use sunlight to synthesize nutrients from carbon dioxide and water.

Amoebozoans

A group of eukaryotic organisms, mostly comprising amoebas, that move and feed by means of pseudopodia, which are temporary projections of cytoplasm.

Plasmodial Slime Molds

A group of protists that form a large, single-celled, multinucleate mass during part of their life cycle.

Cellular Slime Molds

Organisms that live as single cells during one phase of their life cycle but can aggregate to form multicellular reproductive structures when food is scarce.