Answered: Jim paid his brother to provide…

Jim paid his brother to provide computer services for Jim's business. Jim paid him $14,000. Other firms provide the same services for $5,000. How much of this expenditure is deductible?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 30P

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Question

1. Jim paid his brother to provide computer services for Jim's business. Jim paid him $14,000. Other firms provide the same services for $5,000. How much of this expenditure is deductible?

2. XYZ landscaping sold a truck during 2021 for $15,000 recognizing a gain of $2,000. What is the adjusted basis of the truck?

3. Bill earned $50,000 from self employment during 2021. How much must he pay in self employment tax?

4. Ed commutes to work every day during 2021. He spent $3,000 in transportation. How much can he deduct for 2021?

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