A cash basis taxpayer who charges an expense on a bank credit card is allowed to claim a deduction currently, whereas a cash basis taxpayer who charges an expense on a department store credit card is not allowed to claim a deduction until payment is made.

Question

Quizplus · Accepted Answer

Both bank credit card and department store credit card charges are treated the same for cash basis taxpayers, allowing them to claim a deduction when the charge is made, not when the payment is made.

A Cash Basis Taxpayer Who Charges an Expense on a Bank