Choice c is incorrect both the 50000 accrual and the

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Unformatted text preview: rm or long-term when sustained. Capital losses can only be used to offset capital gains up to the amount of the carryback or carryover, not ordinary income. Choices "a", "c", and "d" are incorrect, per the above rule. CPA-02153 Type1 M/C A-D Corr Ans: B PM#75 R 3-01 57. CPA-02153 PII May 93 #48 Page 15 Soma Corp. had $600,000 in compensation expense for book purposes in 19X2. Included in this amount was a $50,000 accrual for 19X2 nonshareholder bonuses. Soma paid the actual 19X2 bonus of $60,000 on March 1, 19X3. In its 19X2 tax return, what amount should Soma deduct as compensation expense? a. b. c. d. $600,000 $610,000 $550,000 $540,000 CPA-02153 Explanation Choice "b" is correct. An accrual basis employer may deduct bonuses paid to nonshareholder employees in the year of accrual if the bonuses are subsequently paid within 2 ½ months after the close of the tax year. Since the $50,000 accrued at year-end 19X2 was paid by March 15, 19X3 (2 ½ months), the 25 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection B...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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