Cash Basis Expenses. How much of the following expenses are
currently deductib le by a cash basis taxpayer?
a. Medical prescriptions costing $20 paid by credit card
(medical expenses already exceed the AGI floor). b. Prepaid interest (not
related to points) of $200 on a residential loan.
c. Taxpayer borrows $300 from the bank to make a charitable
contribution. The $300 is paid to the charitable organization before the end of
the tax year.
d. Taxpayer gives a note to his church indicating an intent
to contribute $300.
e. A calendar-year individual mails a check for $200 to his
church on December 31. The check is postmarked December 31 and clears the bank
on January 4.
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