Ronald Is a Cash Method Taxpayer Who Made the Following

Ronald is a cash method taxpayer who made the following expenditures this year.Which expenditure is completely deductible in this period as a business expense?

A) $4,000 for rent on his office that covers the next 24 months.
B) $3,000 for a new watch for the mayor to keep "good relations" with city hall.
C) $2,500 for professional hockey tickets distributed to a customer to generate "goodwill" for his business.
D) $55 to collect an account receivable from a customer who has failed to pay for services rendered.
E) None of these is completely deductiblE.The rent is prepaid and must be amortized,the watch is a bribe,the gift is too expensive for deduction (and doesn't qualify as entertainment) ,and although a cash method taxpayer cannot deduct bad debts,amounts paid to collect those receivables are fully deductible as an ordinary and necessary business expense.