In January of year 0, Justin paid $9,400 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios? Note: Leave no answers blank. Enter zero if applicable. a. The policy covers the business property from April 1 of year 0 through March 31 of year 1. b. The policy begins on February 1 of year 1 and extends through January 31 of year 2. c. Justin pays $10,600 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. Note: Do not round intermediate calculations. d. Instead of paying an insurance premium, Justin pays $9,400 to rent his business property from April 1 of year 0 through March 31 of year 1.
In January of year 0, Justin paid $9,400 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting.
What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios?
Note: Leave no answers blank. Enter zero if applicable.
a. The policy covers the business property from April 1 of year 0 through March 31 of year 1.
b. The policy begins on February 1 of year 1 and extends through January 31 of year 2.
c. Justin pays $10,600 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. Note: Do not round intermediate calculations.
d. Instead of paying an insurance premium, Justin pays $9,400 to rent his business property from April 1 of year 0 through March 31 of year 1.
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