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deducted, regardless of whether they would otherwise be
deductible as a business expense. Carbine v. Commissioner, 83
T.C. 356, 367-368 (1984) (and cases cited thereat), affd. 777
F.2d 662 (11th Cir. 1985). The fact that the insurance was
required in connection with the financing of petitioner's
business does not warrant a different conclusion. Rodney v.
Commissioner, 53 T.C. 287, 318-319 (1969). We sustain
respondent on this issue.
Accrued Taxes
Petitioner used the cash receipts and disbursements method
to report the income from its long-term rental of automobiles but
deducted tax expenses related to that rental activity on the
accrual method. The tax payments in question were not made until
the year following the taxable year to which they would relate
under an accrual accounting system. Under section 446(c), a
taxpayer may use the cash receipts and disbursements method, the
accrual method, any other method permitted by the statute, or
"any combination of the foregoing methods permitted under
regulations prescribed by the Secretary." Sec. 446(c)(4)
(emphasis added).
Under section 1.446-1(c)(1)(i), Income Tax Regs., for
taxpayers using the cash receipts and disbursements method of
accounting:
Expenditures are to be deducted for the taxable year in
which actually made. * * *
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