Choose the best multiple choice answers and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.

A.   Harry, a shareholder-employee of Fox, Inc., receives a $350,000 salary. The IRS classifies $100,000 of this amount as unreasonable compensation. The effect of this reclassification is to increase Fox’s gross income by $100,000. Harry’s income remains the same

B.   A basketball team that pays a player an annual salary of $10 million can deduct the entire $10 million as salary expense. If the same amount is paid to the CEO of Microsoft, only $5 million is deductible.

C.   Jill sells land to her adult son, Jim, for its $50,000 appraised value. Her adjusted basis for the land is $60,000. Jill’s recognized loss is $0 and James adjusted basis for the land is $60,000.

D.   If a business debt previously deducted as partially worthless becomes totally worthless this year, only the amount not previously deducted can be deducted this year.