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New Member
posted Jun 14, 2021 8:49:23 PM

Can James deduct $100, 000 as a license fee in year 2020? If he paid for 25 year license fee in 2020.

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1 Replies
Level 5
Dec 21, 2021 7:42:00 AM

In most cases, if you are reporting business income to the Canada Revenue Agency, you must use the accrual method of accounting. However, if you are reporting farming, fishing, or commission income, you can choose between the cash and accrual methods of accounting. That means if you have paid your license fee for 25 years, you would only claim the portion of the expense for this year on your tax return.

 

To verify, you can also inquire directly with the CRA.

 

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