Samantha, an accrual basis taxpayer, subscribes to a service that updates a database used in her business. — December 2014 paid the 120 000 subscription for period January through

SOLUTION

Generally, under the “one-year rule” for prepaid expenses, the accrual basis taxpayer as well as the cash basis taxpayer can deduct the entire cost in the year of payment, provided the benefits do not extend beyond the year following the year of payment.