If a taxpayer owes interest, economic performance occurs
I.with the passage of time.
II.when the all-events test is met.
III.when payments are made by the taxpayer.

A)Only statement I is correct.
B)Only statement II is correct.
C)Only statement III is correct.
D)Statements II and III are correct.
E)Statements I, II, and III are correct.

Question

If a taxpayer owes interest, economic performance occurs
I.with the passage of time.
II.when the all-events test is met.
III.when payments are made by the taxpayer.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Only statement III is correct.
D)Statements II and III are correct.
E)Statements I, II, and III are correct.

Quizplus · Accepted Answer

Economic performance occurs with the passage of time when it comes to interest owed by a taxpayer. The all-events test is relevant for deduction of expenses, not for economic performance. Payments made by the taxpayer are not relevant to economic performance when it comes to interest owed.

If a Taxpayer Owes Interest, Economic Performance Occurs