Christopher,a cash basis taxpayer,borrows $1,000 from ABC Bank by issuing a 3-month note on December 1,2013.Christopher receives $940 but must repay $1,000 on the due date.The amount of interest expense deductible in 2013 is $20.

Question

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A cash basis taxpayer can only deduct interest expense when it is actually paid. Since Christopher has not paid any interest in 2013, he cannot deduct any interest expense for that year.

Christopher,a Cash Basis Taxpayer,borrows $1,000 from ABC Bank by Issuing