Can barney take a bad debt deduction for the wages

Assignment Help Financial Accounting

Reference no: EM13967659

First determine the tax issue. Then research the issue and determine your conclusion. Finally, write up your results using the following format:

-Issue (Describe the tax issue, i.e., the question that you are researching

-Conclusion (The answer to the tax question)

-Discussion of Reasoning and Authorities

1. Deducting Bad Debt Loss

Last year your client, Barney Bum luck, worked part-time for Timely Tax Return Preparation Service. Barney was promised an hourly wage plus a commission. He worked under this arrangement from early February until April 15. His accrued pay amounted to $900 plus $120 of commissions. When he went to collect his pay, however, he found only a vacant office with a sign on the door reading “Nothing is sure but death and taxes.”

Can Barney take a bad debt deduction for the wages and commission he was unable to collect?

Reference no: EM13967659

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