2022 Federal/State Tax Practice Questions:

BRIEFLY answer Part A&B.

4. On November 1,2022 , Nada a calendar year and cash basis taxpayer pays $6,000 for one-year premium on a catastrophic liability policy that takes effect December 15, 2022. Nada will receive the benefit starting December 13, 2022. Required: a. Can Nada deduct $6,000 from her 2022 tax return? If yes why? b. Suppose that NADA is a modified accrual basis taxpayer and the payment is for 2 years, how much should NADA deduct for 2022 tax return? Briefly explain