Problem
Addison, a cash method taxpayer, just learned about the concept of cash method versus accrual method a few days ago. Addison immediately came up with a "brilliant idea" to help him pay as little tax as possible in 2022 by playing with the timing advantage of the cash method. Since 2022 is an exceptionally good year for Addison's online business, his income is extremely high. Below are actions that Addison are planning on taking to reduce his 2022 taxable income:
A. Advising all clients to instead of paying him by cash, they should pay him by checks (assume no limitation on when the checks can be redeemed). In that way, Addison can have the flexibility to when to cash in those checks and, thus, control when he will recognize his income in 2022. For example, if he receives $300k worth of checks in 2022, he can just cash out $100k and save the remaining $200k for next year. So, in 2022, Addison will only be taxed on $100k instead of $300k.
B. Prepaying his warehouse rental expenses for the next 2 years (2023 and 2024). In that way, he can deduct all of those in 2022 and thus reduce his taxable income significantly.
C. Selling a few business equipment from his online business for a dirt-cheap price to his second company (which he is also the primary owner). In that way, he can recognize a huge amount of loss from disposition of business assets and thus further reduce his taxable income.
What is your thought on each of the 3 strategies above? Will it work or not? Explain in detail.