Basic Federal Income Taxation: Timing: Cash and Accrual Methods of Accounting

This lesson is best used after studying Federal Income Taxation: Cash and Accrual Methods of Accounting in class. The lesson includes problem sets to work through, allowing you to apply the Code and Regs. to a variety of situations involving accounting methods.

Learning Outcomes

On completion of the lesson, the student will be able to:

1. Describe the timing rules for a cash-method taxpayer as to checks, credit cards, notes, and contracts.
2. Describe the timing rules for an accrual-method taxpayer as to checks, credit cards, notes, and contracts.
3. Identify the situations in which a taxpayer is not permitted to use the cash method of accounting.
4. Explain how rules requiring the capitalization of pre-payments interact with the cash method of accounting.
5. Apply the timing rules for deducting home mortgage points for purposes of the home mortgage interest deduction.