property income

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March 22, 2019 at 3:17 am #510023

sguha
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if we asses rental income then there s no need to reduct bad debt right as we only include income received on cash basis. Only in case of accrual we have to show income earned and adjust bad debt against it right?

and in case while doing accrual basis if bad debt is given where a part of the bad debt is pertaining to previous yr which we didnt know in last tax year….can that be adjusted in current tax year just like we carry forward the previous loss to adjust against income following yr?

March 25, 2019 at 9:11 am #510358

Tax Tutor
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Yes – automatic bad debt relief is given on the cash basis as the cash is never received! A bad debt adjustment would be required for the accruals basis.
The taxpayer will be aware of bad debts by the time the income tax return needs to be submitted and tax paid.
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