Nick pays monthly interest of $500 on the first day of every month in relation to his rental property loan. This loan existed in the prior year. During the current year, Nick pays this interest monthly until 1 January CY when he prepays an extra 10 months of interest.

Based on the above facts and relevant tax laws, assuming Nicks business is a SBE and he has elected to use the election available for prepaid expenses, what is the total deduction Nick can claim for interest payments in the current year?

		$8,000
		$5,000
		$11,000
		$6,000