Elcox Company, a calendar year, cash basis taxpayer, paid $950 to purchase eight months' worth of office supplies on December 12. Elcox can deduct $950 in the year of payment.

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As a cash basis taxpayer, Elcox can deduct expenses in the year of payment. Since the $950 for eight months' worth of office supplies was paid in December, it can be deducted in the current year.

Elcox Company, a Calendar Year, Cash Basis Taxpayer, Paid $950