Jones operates an upscale restaurant and he pays experienced cooks $38,000 per year. This year, he hired his son as an apprentice cook. Jones agreed to pay his son $42,400 per year. Which of the following is a true statement about this transaction?
A)Jones will be allowed to deduct $42,400 only if his son eventually develops into an expert cook.
B)Jones will be allowed to accrue $42,400 only if he pays his son in cash.
C)Jones will be allowed to deduct $38,000 as compensation and another $4,400 can be deducted as an employee gift.
D)Jones is not entitled to any business deduction until the son is an experienced cook.
E)None of the choices are true.