Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid.
-Rent paid for one-year by contract on November 1 by an accrual-basis taxpayer.

Question

Quizplus · Accepted Answer

For an accrual-basis taxpayer, rent paid in advance is typically deductible only for the portion that applies to the current tax year. Since the rent is paid on November 1 for one year, only the rent for November and December is deductible in the current year, making it partially deductible.

Designate Whether the Following Expenses Are Fully Deductible (F), Partially