In October 2017,Jonathon Remodeling Co

question 64

Multiple Choice

In October 2017,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 2018.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 2017 and a bad debt deduction of $30,000 in 2018.
• C)$30,000 income in 2017 and a STCL of $30,000 in 2018 limited to $3,000 after netting.
• D)$30,000 income in 2017 and then must amend last year's return to show $0 income when advised of the bankruptcy.

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Definitions:

Projection Model

An analytical tool used to forecast future events or trends based on current or historical data.

Scenario Forecast

A methodology used to anticipate future conditions or developments based on a set of possible scenarios.

Delphi Technique

A structured communication technique, often used in forecasting, which relies on a panel of experts answering questionnaires in two or more rounds to converge towards a consensus answer.

Simulation

A method used to create a simplified model of reality to explore potential outcomes and dynamics.