Susanne Watson is an employee and sole-shareholder of Klaxon. Klaxon is a calendar-year company which uses the accrual method of accounting. On December 30, 2018, Klaxon awarded Susanne a bonus of $30,000 based on the company's 2017 year-end profit. The bonus was reasonable, ordinary and necessary. It was paid on February 11, 2019. In what year can Klaxon deduct the bonus it paid to Susanne? Susanne is a calendar-year, cash method taxpayer.

Question 6 options:

1)

2017

2)

2018

3)

2019

4)

The bonus cannot be deducted by Klaxon, Inc.