How much interest, if any, can jaxon deduct in year 0 if his business uses the cash method of accounting for tax purposes?

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Business

Grace Eaton

6 November, 01:12

How much interest, if any, can jaxon deduct in year 0 if his business uses the cash method of accounting for tax purposes?

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Rory Rich · Answer 1

Jaxon can deduct in year 0 if his business uses the cash method of accounting for tax purposes $750 under either cash or accrual method of accounting. Jaxon can only deduct two months of interest ([$4,500/12] Ă - 2) because prepaid interest is not deductible under either method of accounting.