Christopher,a cash basis taxpayer,borrows $1,000 from ABC Bank by issuing a 3-month note on December 1,2015.Christopher receives $940 but must repay $1,000 on the due date.The amount of interest expense deductible in 2015 is $20.

Question

Quizplus · Accepted Answer

Christopher did not pay any interest in 2015, as the interest expense was incurred over the 3 months of the note and will only be deductible when paid in 2016.

Christopher,a Cash Basis Taxpayer,borrows $1,000 from ABC Bank by Issuing