In the case of a corporation, which of the following statements is correct with regard to the deduction for business bad debts? A. Either the allowance method or the direct charge-off method may be used, if the election is made in the corporation's first taxable year. B. On approval from the IRS, a corporation may change its method from direct charge-off to allowance. C. If the allowance method was consistently used in prior years, the corporation may take a deduction for a reasonable addition to the allowance for credit losses. D. A corporation is required to use the direct charge-off method rather than the allowance method.
In the case of a corporation, which of the following statements is correct with regard to the deduction for business bad debts? A. Either the allowance method or the direct charge-off method may be used, if the election is made in the corporation's first taxable year. B. On approval from the IRS, a corporation may change its method from direct charge-off to allowance. C. If the allowance method was consistently used in prior years, the corporation may take a deduction for a reasonable addition to the allowance for credit losses. D. A corporation is required to use the direct charge-off method rather than the allowance method.
Related questions
Question
In the case of a corporation, which of the following statements is correct with regard to the deduction for business bad debts?
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A.
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Either the allowance method or the direct charge-off method may be used, if the election is made in the corporation's first taxable year. | |
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B.
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On approval from the IRS, a corporation may change its method from direct charge-off to allowance. | |
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C.
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If the allowance method was consistently used in prior years, the corporation may take a deduction for a reasonable addition to the allowance for credit losses. | |
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D.
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A corporation is required to use the direct charge-off method rather than the allowance method. |
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