Clyde operates a sole proprietorship using the cash method. This year Clyde made the following expenditures:
$480 to U.S. Bank for 12 months of interest accruing on a business loan from September 1st of this year through August 31st of next year.
$600 for 12 months of property insurance beginning on July 1 of this year.
What is the maximum amount Clyde can deduct this year?
A. $760
B. $600
C. $480
D. $160
E. $360
Answer: $760