Harold, a cash basis taxpayer, borrows $65,000 for his business on a 2-year note from First City Bank on December 1, 2018. To close on the loan agreement, Harold is required to prepay interest of $4,800 on December 1. How much interest can Harold deduct in 2018?
A) $- 0 -
B) $200
C) $400
D) $2,400
E) $4,800
Correct Answer:
Verified
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