A is corrent. Dr. Berger’s (a cash-basis taxpayer) income consists of the $200,000 received from patients and the $30,000 received from third-party reimbursers during 2012. His 2012 deductions include the $20,000 of salaries and $24,000 of other expenses paid in 2012. The year-end bonuses will be deductible for 2013, the year in which they were paid.
B is incorrect. Net income for 2012 totals $186,000.
B is incorrect. Net income for 2012 totals $186,000.
D is incorrect. Net income for 2012 totals $186,000.
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