On December 31, 2016, Peregrine Corporation, an Accrual Method, Calendar

question 12

Multiple Choice

On December 31, 2016, Peregrine Corporation, an accrual method, calendar year taxpayer, accrued a performance bonus of $100,000 to Charles, a cash basis, calendar year taxpayer. Charles is president and sole shareholder of the corporation. When can Peregrine deduct the bonus?

• A)In 2016, if the bonus was authorized by the Board of Directors and payment was made on or before April 15, 2017.
• B)In 2017, if payment was made at any time during that year.
• C)In 2016, if payment was made on or before April 15, 2017.
• D)In 2017, but only if payment was made on or before April 15, 2017.
• E)None of the above.