Gabby Owns and Operates a Part-Time Art Gallery,now in Its

Multiple Choice

Gabby owns and operates a part-time art gallery,now in its fifth year.She views it as a business activity,but she is concerned that the IRS will challenge her classification and consider it a hobby.Her business results,using the cash method of accounting,were net losses in the first and fourth years and small profits in the second and third years.It is now almost year-end and based on projections,the business is showing a small profit of $6,000.Repairs to the security system and to the heating/cooling system were recently completed and these bills total $7,000.When should Gabby pay these bills?

A) before year-end to get the current year deduction
B) next year
C) split into $6,000 this year and $1,000 next year
D) It does not matter when she pays the bills.The work was performed this year,so the costs will be deducted this year.