Problem:
Elaine is a physician who uses the cash method of accounting for tax purposes. During the current year, Elaine bills Ralph $1,200 for office visits and outpatient surgery. Unfortunately, unknown to Elaine, Ralph moves away leaving no payment and no forwarding address.
Question: What is the amount of Elaine's bad debt deduction with respect to Ralph's debt?
Note: Be sure to show how you arrived at your answer.