A client recently "bought" his way out of a long term contract that had 10 years left on it. Can an expense be taken as a single payment in the year of the payment or must he amortize the buyout over the ten years left on his contract?
-
-
Well.. we do not know what the contract was about, but in most cases I would expect that you could deduct/expense the full payment made in the year actually paid. -
Unless there is some related future taxable contract benefit yet to be received (which is rare) contract termination buyouts are generally deductable in year paid.Comment
Comment