Craig wrote:

- quote -

Hmmm... I would probably deduct the payments on the cash
basis (rather than accrual) even though I can't explain why.
<grin
MTW

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Accrual basis S corp operating 8 retail stores filed
bankruptcy in June, 03 to break leases (running from 1 to
4.5 years) on closing 5 of the 8 stores. They stopped paying
rents in June, 03 and did not accrue any rent expense during
the time on non-payment.. The final bankruptcy order
required that the company pay one years rent payments to
each lessor amortized over five years at 5% interest.
Payments began in July, 04. For the 2004 tax return how
should the rent obligation (total for 5 store $250,000;
annual $50,000) be recorded?

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