In 20X1, Radar Corporation hired Steve to install a computer system for the company and paid him $6,000 for the work. Radar soon realized there were problems with the system and asked Steve to refund the payment. At the end of the year the dispute had not been resolved. Steve is in the 32% tax bracket for 20X1. During 20X2, when Steve is in the 24% tax bracket, he issues a repayment to Radar. Which of the following statements is true regarding these transactions?

a. If the repayment is for $6,000, Steve cannot deduct the $6,000 in 20X2.

b. If the repayment is for $6,000, Steve can only offset his 20X2 tax liability with a credit of $1,440. c. If the repayment is for $2,000, Steve can offset his 20X2 tax liability with a credit of $640.

d. If the repayment is for $2,000, Steve will lose a total of $160 because of the income and repayment.

e. None of the answers provided is correct.