TAX_T1_Sol16.pdf - 65. Award: 10.00 points Joe is a...

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65.Award: 10.00 pointsJoe is a self-employed electrician who operates his business on the accrual method. This year Joepurchased a shop for his business, and for the first time at year-end he received a bill for $4,500 ofproperty taxes on his shop. Joe didn't pay the taxes until after year-end but prior to filing his taxreturn. Which of the following is a true statement?If he elects to treat the taxes as a recurring item, Joe can accrue and deduct $4,500 oftaxes on the shop this year.The taxes are a payment liability.The taxes would not be deductible if Joe's business was on the cash method.Unless Joe makes an election, the taxes are not deductible this year.All of the choices are true.Joe can elect to deduct the taxes accruing this year or he can elect to deduct them as recurringitems. If neither election is made, then Joe deducts them in the year paid.
ReferencesMultiple ChoiceDifficulty: 2 MediumLearning Objective: 01-05 Apply cash andaccrual methods to determine businessincome and expense deductions.

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Term
One
Professor
N/A
Tags
Taxes, accrual method, accrual methods

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