Question

Ashley is an attorney who specializes in family law. She uses the cash method of accounting and is a calendar-year taxpayer. Last year, she represented a client in a lawsuit and billed the client $5,000 for her services. Although she made repeated attempts, Ashley was unable to collect the outstanding receivable. Finally, in November of the current year, she finds out that the individual has moved without leaving any forwarding address. Ashley’s attempts to locate the individual are futile.

What is the amount, if any, of the deduction that she may claim in connection with this bad debt?

Answer 1

Solution:

In real money premise accouning, pay and costs is recorded as on when it is gotten and paid on money.

To have the capacity to deduct a terrible obligation, it more likely than not been already incorporated the sum in your salary or advanced out. Be that as it may, in real money premise bookkeeping as the bill has not yet been accounted as the installment for it has not yet been gotten. So she can not guarantee any derivation in regard of the awful obligation.