17 10 points Save Answer Bob operates a clothing business using the accrual method over a calendar year . In October of last year , Bob contracted with his father , Tim , for consulting advice . Tim is a cash - basis calendar - year taxpayer , and he billed Bob for $ 6,000 of consulting fees . This amount was comparable to amounts charged by other consultants ( a reasonable amount ) . Bob paid $ 2,500 of the consulting fee by December 31st of last year , but the remaining $ 3,500 was not paid until January of this year . When can Bob deduct the consulting fee ? For the toolbar , press ALT + F10 ( PC ) or ALT + FN + F10 ( Mac ) . B IUS Paragraph Open Sans , ... 10pt < > )