Question
Required information [The following information applies to the questions displayed below.] In January of year 0, Justin paid $7,800 for an insurance policy that covers
Required information
[The following information applies to the questions displayed below.] In January of year 0, Justin paid $7,800 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting.
What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios? (Leave no answers blank. Enter zero if applicable.)
a. The policy covers the business property from April 1 of year 0 through March 31 of year 1.
c. Justin pays $9,000 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. (Do not round intermediate calculations.)
d. Instead of paying an insurance premium, Justin pays $7,800 to rent his business property from April 1 of year 0 through March 31 of year 1.
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Required information
[The following information applies to the questions displayed below.] In October of year 0, Janine received a $15,520 payment from a client for 32 months of security services she will provide starting on September 1 of year 0. This amounts to $485 per month. Janine is a calendar-year taxpayer.
a. When must Janine recognize the income from the $15,520 advance payment for services if she uses the cash method of accounting?
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Year 2
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Year 1
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Year 1 and year 2
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Year 0 and year 1
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Year 0
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