Author Question: On December 1, 2016, Delilah borrows $2,000 from her credit union to use in her business. Under the ... (Read 50 times)

mckennatimberlake · **on:** Sep 13, 2020

Question 1

Explain why interest expense on investments is limited to net investment income.

Question 2

On December 1, 2016, Delilah borrows $2,000 from her credit union to use in her business. Under the terms of the contract, Delilah actually receives $1,940 but is required to repay $2,000 in three months.
a. What amount may Delilah deduct as interest expense in 2016 and in 2017 if she is a cash basis taxpayer?
b. What amount may Delilah deduct as interest expense in 2016 and in 2017 if she is an accrual basis taxpayer?

Rilsmarie951 · **Reply #1 on:** Sep 13, 2020

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