Match the Proper Deduction Method with the Correct Expenditures

question 145

Multiple Choice

Match the proper deduction method with the correct expenditures.
-Premiums the insured taxpayer pays for life insurance

• A)Capitalized and amortized over a number of accounting periods
• B)Expensed in the period incurred
• C)Not deductible
• D)Can be capitalized and amortized or deductible depending on the amount of the expenditure

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Definitions:

Market Value

The market rate for buying or selling an asset or service currently.

Ownership

The state or fact of exclusive rights and control over property, which can be tangible or intangible.

Valuation Allowance

An accounting procedure that an entity might use against its deferred tax assets indicating that it is more likely than not that some portion or all of the asset will not be utilized.

Trading Investments

Assets held by a firm for the purpose of selling them in the short term to generate profit from price fluctuations.