Question
20- Copper Corporation, a C corporation, had gross receipts of $26,000,000 in 2018, $27,000,000 in 2019, and $24,000,000 in 2020. Gold Corporation, a personal service
20-
Copper Corporation, a C corporation, had gross receipts of $26,000,000 in 2018, $27,000,000 in 2019, and $24,000,000 in 2020. Gold Corporation, a personal service corporation (PSC), had gross receipts of $25,000,000 in 2018, $28,000,000 in 2019, and $26,000,000 in 2020. Which of the corporations will be allowed to use the cash method of accounting in 2021?
a.Copper Corporation only.
b.Both Copper Corporation and Gold Corporation.
c.Neither Copper Corporation nor Gold Corporation.
d.Gold Corporation only.
21-In the current year, Great Lakes Corporation, a calendar year C corporation, has $4,540,000 of adjusted taxable income and $136,200 of business interest income. Great Lakes has no floor plan financing interest and their business interest expense for the year is $1,816,000. Assume that Great Lakes has average gross receipts for the prior three-year period of $32,800,000. What is Great Lakes current-year deduction for business interest?
Answer:.......................................?.
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