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Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 408 Weeks Ago, 3 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Related Party Transactions.
Sally is an attorney who computes her taxable income using the cash method of accounting. Sage Corporation, owned 40% by Sally’s brother, 40% by her cousin, and 20% by her grandmother, uses the accrual method of accounting. Sally is a calendar-year taxpayer, whereas Sage Corporation;s fiscal year ends on January 31. During 2012, Sally does some consulting work for Sage Corporation for a fee of $10,000. The work is completed on December 15 and Sage receives Sally’s invoice on that date. For each of the following assumptions, answer the following questions. During which tax year must Sally report the income? During which tax year must Sage Corporation deduct the expense?
The payment to Sally is made on December 27, 2013
The payment to Sally is made on January 12, 2014
The payment to Sally is made in February 3, 2014
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