Mr John Carre Owns 67% of the Stock of JC

question 93

Multiple Choice

Mr. John Carre owns 67% of the stock of JC Inc. and is employed as the corporation's CEO. The corporation is a calendar year, accrual basis taxpayer. On December 14, 2015, the board of directors authorized a $45,000 year-end bonus for Mr. Carre, which was paid to him on February 1, 2016. In which year can JC Inc. deduct the bonus?

• A) 2015.
• B) 2016.
• C) JC Inc. can deduct only $14,850 (33%) of the bonus in 2015.
• D) JC Inc. can never deduct the bonus.

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Definitions:

Fluid Intelligence

The ability to think abstractly, reason, identify patterns, and solve new problems without relying on previous knowledge.

Puzzles

Problems or enigmas that require ingenuity and often persistence to solve, typically for entertainment.

Crystallized G

Crystallized intelligence, a form of intelligence that involves the ability to use skills, knowledge, and experience to solve problems and adapt to new situations.

Fluid G

Referred to as fluid intelligence, it is the capacity to think logically and solve problems in novel situations, independent of acquired knowledge.