Christopher,a cash-basis taxpayer,borrows $1,000 from ABC Bank by issuing a 3-month note on December 1,2019.Christopher receives $940 but must repay $1,000 on the due date.The amount of interest expense deductible in 2019 is $20.

Question

Quizplus · Accepted Answer

Christopher did not pay any interest in 2019 since he only received $940 and must repay $1,000 on the due date. Therefore, there is no interest expense deductible in 2019.

Christopher,a Cash-Basis Taxpayer,borrows $1,000 from ABC Bank by Issuing a 3-Month