An Accrual Basis Taxpayer Must Account for the Expense of a Legal

question 103

True/False

An accrual basis taxpayer must account for the expense of a legal settlement resulting from a tort under the cash method.

---

Definitions:

Uncertain Event

An occurrence or outcome that cannot be predicted with total confidence due to the unpredictability of certain factors or information.

Odds Increase

"Odds increase" implies that the probability or likelihood of a specific event or outcome happening is rising.

Gambler's Fallacy

The incorrect belief that future probabilities are altered by past events in a random process.

State Lottery

A government-regulated form of gambling which involves the drawing of numbers for a prize.