contestada

If a cash basis business owner pays 18 months of rent expense in advance during the last month of the tax year, how is this treated on the tax return? What is the reason tax law requires this treatment?

Respuesta :

cancinodavidq

Answer:

Check the following consideration

Explanation:

Since the business owner follows cash basis of accounting the treatment is amount expensed during the financial year can be shown as expenses. hence in the current case rent for 18months can be shown as expenses for that financial year and it can be shown as a deduction while computing tax liability.