RollerQueens Inc., a calendar- year accrual method taxpayer, enters into a contract each September with a cleaning service to clean the arena after each game during the team's October through March season. Under the criteria of the economic performance test, the RollerQueens Inc.'s deduction for cleaning expense

Question

Quizplus · Accepted Answer

The economic performance test requires that a taxpayer generally cannot deduct an expense until economic performance occurs. For services, economic performance occurs when the services are performed. In this case, the cleaning services are performed after each game during the October through March season. Therefore, RollerQueens Inc. can deduct the cleaning expense in full in the year the services are performed.