Question

Samantha, an accrual basis taxpayer, subscribes to a service that updates a database used in her business. In December 2019, Samantha paid the $120,000 subscription for the period January 2019 through December 2020. What is Samantha's deduction for 2019?

Answer 1

Superman

Step-by-step explanation:

Answer 2

$60,000

Step-by-step explanation:

The amount deductible for 2019 is the expense incurred on accrual basis bu Samantha. Since the cost of the subscription paid for was $120,000 for 2 years (January 2019 to December 2020).

It means that the expense for 2019

= 1/2 × $120,000

= $60,000

This represents her deduction for 2019.