Lawes Company, a cash basis business, mailed a $24,500 invoice to MWQ Partnership for professional services rendered. MWQ offered to pay the invoice by transferring 250 shares of ConAgri common stock to Lawes. The shares are selling on the NYSE at $98 per share. If Lawes accepts the shares in payment, it recognizes:
A. No taxable income until it sells the ConAgri shares for cash.
B. It is illegal for a cash basis taxpayer to accept a noncash payment.
C. $24,500 taxable income.
D. No taxable income.
Answer: C
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