On Dec. 15, 2019, Julias Service Station, an accrual method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest wont accrue until 2020. Julias Service Station will be displayed for the first time at a trade show in July 2020. On Dec. 16, 2019, Julias prepaid the $8,000 trade show booth rental expense. The payment isnt due until May 2020, and the use of the booth will occur in July 2020. In addition, On Dec. 28, 2019, Eds Equipment repaired some equipment in Julias business and billed Julias $2,000. Julias received the invoice on Dec. 28, 2019, and paid the $2,000 invoice on Jan. 29, 2020.

In addition to the $14,000 in expenses, some of the equipment used in Julia's Service Station's business requires ongoing maintenance estimated to cost $30,000 every 3 years. In 2019, for financial accounting purposes, Julia's accrues a maintenance expense of $10,000. The maintenance will not be performed until 2021, and Julia will not pay for the maintenance until after the work is performed.

How much of the maintenance expense may Julias Service Station deduct in 2019?

The answer is not 26000!