Examples
1) Jack hires a contractor to repair his building used in his business. The repairs are completed in year 1 and the contractor bills Jack at the end of year 1. The repairs are satisfactory to Jack and he is allowed to pay the bill within the first 6 months in year 2.
Since there appears to be no condition to Jack’s legal obligation to pay, he should be able to deduct the repair expense in year 1 even if he pays it in year 2.
2) Assume instead that the repairs require certification by an architect or engineer. Part of Jack’s expense (say, 10%) is not payable until the certification, which occurs in year 2. In this case, the 10% portion of the expense is conditional upon the certification, so that portion is deductible in year 2. The remaining portion should be deductible in year 1.