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

question 64

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 2014.In December,Octo received a billing statement from Samantha for $5,000 and paid Samantha the $5,000 in January 2015. Samantha is a calendar year taxpayer.When may Octo deduct the $5,000?

• A)2014
• B)2015
• C)Either 2014 or 2015
• D)The expense is not deductible since Samantha is Bart's sister.

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Definitions:

Cell Wall

A rigid layer that lies outside the cell membrane of the cells of plants, fungi, and bacteria, providing structural support and protection.

Iron Sulfide

A chemical compound consisting of iron and sulfur, often found in the Earth's crust, and used in various industrial applications.

Carbon Monoxide (CO)

A colorless, odorless, and poisonous gas produced by the incomplete burning of carbon-containing fuels.

Protocell

An early, simple, cellular structure that is considered a precursor of true cells, possibly forming the basis for the origin of life.