On December 10, 2018, Dell Corporation (a calendar-year taxpayer) accrues an obligation for a $100,000 bonus to Muriel, a sales representative who had had an outstanding year. Muriel owns no Dell Corporation stock. The bonus is paid on May 5, 2019. What is Dell's deduction for 2018? What is Dell's deduction for 2019?
What will be an ideal response?
Dell is allowed $0 deduction for 2018 as the bonus is not paid by March 15, 2019. Dell will take the $100,000 deduction in 2019.
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