On December 1, 2018, Delilah borrows $2,000 from her credit union to use in her business. Under the terms of th contract, Delilah actually receives $1,940 but is required to repay $2,000 in three months.
a. What amount may Delilah deduct as interest expense in 2018 and in 2019 if she is a cash- basis taxpayer?
b. What amount may Delilah deduct as interest expense in 2018 and in 2019 if she is an accrual- basis taxpayer?

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The Answer of On December 1, 2018, Delilah borrows $2,000 from her credit union to use in her business. Under the terms of th contract, Delilah actually receives $1,940 but is required to repay $2,000 in three months.
a. What amount may Delilah deduct as interest expense in 2018 and in 2019 if she is a cash- basis taxpayer?
b. What amount may Delilah deduct as interest expense in 2018 and in 2019 if she is an accrual- basis taxpayer?

On December 1, 2018, Delilah Borrows $2,000 from Her Credit