Mario operates a business and uses the accrual method of accounting. During 2020, Mario hires his brother, Luigi, who is a cash method taxpayer, to provide accounting services to Mario's business, and Luigi completes all his work before year end. In December of 2020, Luigi bills Mario $2,500 for the accounting services but receives only $2,000 in payments from Mario. Determine the amount Mario may deduct in 2020 with regard to the accounting services provided by Luigi.

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Answer As per the accrual method of accounting a person is allowed tax deductions and expens... View the full answer