While I just finised the live course on R1 (Becker), I have a question on the lecture and the material:

On pg. 27, as for the profit and loss of business, the teacher emphasized that the Expenses should be "incurred and paid". However, since the taxpayer can choose the accural basic as their accounting method, why the expenses must be paid in order to recognize on tax?

Could anyone explain the contradiction? Thanks in advance!

Thanks cpa0123!

Here I come again -

Becker R2, class questions #9,CPA-01926

Taylor, an unmarried taxpayer, had $90,000 in adjusted gross income for 20x4. During 20x4, Taylor donated land to a church and made no other contributions. Taylor purchased the land in 1994 as an investment for $14,000. The land's fair market value was $25,000 on the day of the donation. What is the maximum amount of charitable contribution that Taylor may deduct as an itmized deduction for the land donation in 20x4?

a.25,000

b.14,000

c.11,000

d.0

Ans:a.

What confuses me is on R2, pg.24. In the paragraph of 5-b-(1): A gift must be in the form of cash or (FMV) property. The deduction for contributed property is usually measured by the lesser of the property's basis or its fair value market at the time the contribution is made.

According to above, the basis for the land donated by Taylor is 14,000, which is lesser than the FMV 25,000 at the time of donation. The deduction should be measured at the lesser of basis, not the FMV. However, the answer is a, FMV $25,000. Do I misunderstand anything on this?

Thanks for any help!