Jason Budd, CPA, reports on the cash basis. In April 2014, Budd billed a client $3,5000 for the following professional services: - Personal estate planning : $2,000 - Personal tax return preparation: $1,000 - Compilation of business financial statements: $500 No part of the $3,500 was ever paid. In April 2015, the client declared bankruptcy, and the $3,500 obligation became totally uncollectible. What loss can Budd deduct on his 2015 tax return for this bad debt?

Jason Budd, CPA, reports on the cash basis. In April 2014, Budd billed a client $3,5000 for the following professional services: - Personal estate planning : $2,000 - Personal tax return preparation: $1,000 - Compilation of business financial statements: $500 No part of the $3,500 was ever paid. In April 2015, the client declared bankruptcy, and the $3,500 obligation became totally uncollectible. What loss can Budd deduct on his 2015 tax return for this bad debt?

Jason Budd, CPA, reports on the cash basis. In April 2014, Budd billed a client $3,5000 for the following professional services:
- Personal estate planning : $2,000
- Personal tax return preparation: $1,000
- Compilation of business financial statements: $500
No part of the $3,500 was ever paid. In April 2015, the client declared bankruptcy, and the $3,500 obligation became totally uncollectible. What loss can Budd deduct on his 2015 tax return for this bad debt?






a. $0
b. $500
c. $1,500
d. $3,500





Answer: A