On December 19, 2019, Logo Inc., an accrual basis corporation, accrued $50,000 compensation expense for a routine year-end bonus payable to Mr. Craig, who is Logo's CFO. Logo paid the $50,000 to Mr. Craig on April 25, 2020. Which of the following statements is true?
A. Regardless of whether Logo and Mr. Craig are related parties, Logo can't deduct the accrued compensation expense in 2019.
B. If Mr. Craig and Logo are not related parties, Logo can deduct the accrued expense in 2019.
C. If Mr. Craig and Logo are not related parties, Mr. Craig can elect to include the $50,000 bonus in gross income in either 2019 or 2020.
D. If Mr. Craig and Logo are related parties, Mr. Craig must include his $50,000 bonus in 2019 gross income.
Answer: A
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