In January of year 0, Justin paid $7,800 for an insurance policy that covers his business property for accidents and cas
Posted: Sun Jun 05, 2022 9:15 pm
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.
b. The policy begins on February 1 of
year 1 and extends through January 31 of year 2.
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.
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.
b. The policy begins on February 1 of
year 1 and extends through January 31 of year 2.
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.