Generally, deductions for additions to reserves for estimated future costs (e. g., an allowance for estimated warranty costs) are not allowed for Federal income tax purposes because allowing the deduction would: a. Violate established public policy. b. Violate the tax benefit rule. c. Result in a mismatching of revenues and expenses. d. Violate the all events test and economic performance requirement. e. None of these choices are correct.
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Home » Business » Generally, deductions for additions to reserves for estimated future costs (e. g., an allowance for estimated warranty costs) are not allowed for Federal income tax purposes because allowing the deduction would: a. Violate established public policy.