Taylor, a cash basis architect, rents the building in which his office is located for $5,000 per month. He commenced his practice on February 1, 2019. In order to guarantee no rent increases during an 18-month period, he signed an 18-month lease and prepaid the $90,000 on February 1, 2019. How much can Taylor deduct as rent expense for 2019?
What will be an ideal response?
Taylor is a cash basis taxpayer. Thus, he is eligible to use the 12-month rule on prepayments. Since his prepayments of 18 months' rent does not extend beyond the end of 2020, he can deduct the $90,000 paid in 2019.
You might also like to view...
The adjusting entry for the expiration of prepaid advertising, originally recorded as an asset,
A) Advertising Expense - Debit; Prepaid Advertising - Credit B) Prepaid Advertising - Debit; Cash - Credit C) Advertising Expense - Debit; Cash - Credit D) Prepaid Advertising - Debit; Advertising Expense - Credit
Customer relations are usually part of
A) the supply chain. B) the value chain. C) both the value chain and the supply chain. D) neither the value chain nor the supply chain.
Whatever the social media metrics an organization tracks, the ultimate criteria is to
A. find the most reliable social media metric. B. use as many metrics as possible to track a brand. C. demonstrate a positive ROI for the brand on its social media investment. D. constantly change the metrics being used. E. utilize the least expensive social media metric.
An injured party that does not suffer an actual loss from the breach of a contract is entitled to consequential damages
Indicate whether the statement is true or false