Question

Sergio purchases $3,000-worth of supplies from a local vendor. The supplies are delivered on April 1, 2018. The supplies are fully used up on December 31, 2018. Because of unusual circumstances, a bill for the supplies arrives from the vendor on February 1, 2019, and is promptly paid. When can Sergio deduct the expenses?

Answer 1

Sergio can deduct the expenses in the tax year of 2018 as that is when the supplies were fully used up.

Step-by-step explanation:

Sergio can deduct the expenses in the year in which they are used up or consumed. In this case, the supplies were fully used up on December 31, 2018. Therefore, Sergio can deduct the expenses in the tax year of 2018.

It doesn't matter when the bill arrives or when it is paid. The key factor is when the supplies are actually used up or consumed. In this case, the supplies were fully used up before the end of 2018, so Sergio can deduct the expenses in that year.