Isabel a calendar-year taxpayer uses cash method of

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Isabel, a calendar-year taxpayer, uses cash method of accounting for her sole proprietorship. In late December she received a $ 20,000 bill from her accountant for consulting services related to her small business. Isabel will pay the $20,000 bill anytime before January 30 of next year without penalty. Suppose her marginal tax rate is 40 % this year and next year, and that she can earn an after-tax rate of return of 8% on her investments.

Reference no: EM13370952

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