Which of the following statements is false?
A)A tax deduction is allowed to a taxpayer for estimated warranty expense.
B)A tax deduction is allowed in association with a warranty only in the year in which warranty work is performed.
C)A tax deduction is allowed for a contested amount if the amount is paid prior to final settlement.
D)No tax deduction is allowed to an accrual-basis taxpayer for the amount of a down payment for a non-recurring expense when the work is to be performed in a subsequent period.

Question

Quizplus · Accepted Answer

A tax deduction for estimated warranty expenses is not allowed because deductions are generally only permitted for actual expenses incurred, not estimates.

Which of the Following Statements Is False