Jason Budd, CPA, reports on the cash basis. In April 2006, Budd billed a client $3,500 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 2007, the client declared bankruptcy, and the $3,500 obligation became totally uncollectible. What loss can Budd deduct on his 2007 tax return for this bad debt?
- $0
- $ 500
- $1,500
- $3,500