12 month rule - Prepaid expenses - Spidell

12 month rule – Prepaid expenses

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Message Board 12 month rule – Prepaid expenses

This topic contains 0 replies, has 1 voice, and was last updated by Anonymous 2 months, 2 weeks ago.

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    Anonymous

    For accrual basis businesses “the 12 month rule” allows for the deduction of a prepaid expense in the current year if the “all events test” and the “economic performance test” are met. What is unclear to me and what I can’t find an answer to is “the 12 month rule” available to small and large businesses regardless of the amount of their gross sales.