Olivia and choir and tiredOlivia incurred 6,000 in qualify actual vehicle expenses related to her self- employment which includes depreciation she had no expenses for parking tolls or order loan interest during the year Olivia drove the vehicle for $10,000 miles out of that 2500 were business use only a thousand miles for commuting and the rest were personal miles what is Olivia's maximum deduction for her car

Olivia and choir and tiredOlivia incurred 6,000 in qualify actual vehicle expenses related to her self- employment which includes depreciation she had no expenses for parking tolls or order loan interest during the year Olivia drove the vehicle for $10,000 miles out of that 2500 were business use only a thousand miles for commuting and the rest were personal miles what is Olivia's maximum deduction for her car

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter3: Business Income And Expenses

Section: Chapter Questions

Problem 8P: Martha is a self-employed tax accountant who drives her car to visit clients on a regular basis. She...

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Genie meets the requirements to deduct expenses related to a home office that she maintains in the spare bedroom of her rented house. She incurered the following expenses during the year: Annual cost of electricty for the entire house $1728 Cost of repairing light fixtures in the home office $200 Annual rent for the house $24000 the house is a total of 2000 square feet. the home office measures 156 square feet Genie uses the actual method of deducting expenses, what is her total home office deduction?
During the year, Maxine pays the following amounts related to her residence: Mortgage interest $8,000 Real estate taxes 4,000 Painting of exterior 2,000 Utilities 3,400 New roof 10,000 She also paid the following for her daughter's house: Real estate taxes (owned and used by daughter) $1,500 a. Which expenses are deductible by Maxine if she is eligible to itemize her deductions? b. Calculate the total dollar amount. c. Are the deductions "For" or "From" AGI?
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Fred, a self-employed taxpayer, travels from Denver to Miami primarily on business. He spends five days conducting business and two days sightseeing. His expenses are 400 (airfare), 150 per day (meals), and 300 per night (lodging). What are Freds deductible expenses?
Trip Garage, Inc. (459 Ellis Avenue, Harrisburg, PA 17111), is an accrual basis taxpayer that repairs automobiles. In late December 2019, the company repaired Samuel Mosleys car and charged him 1,000. Samuel did not think the problem had been fixed and refused to pay; thus, Trip refused to release the automobile. In early January 2020, Trip made a few adjustments and convinced Samuel that the automobile was working properly. At that time, Samuel agreed to pay only 900 because he did not have the use of the car for a week. Trip said fine, accepted the 900, and released the automobile to Samuel. An IRS agent thinks Trip, as an accrual basis taxpayer, should report 1,000 of income in 2019, when the work was done, and then deduct a 100 loss in 2020. Prepare a memo to Susan Apple, the treasurer of Trip, with the recommended treatment for the disputed income.
Martha is a self-employed tax accountant who drives her car to visit clients on a regular basis. She drives her car 4,000 miles for business and 10,000 for commuting and other personal use. Assuming Martha uses the standard mileage method, how much is her auto expense for the year? Where in her tax return should Martha claim this deduction? _________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________
David is a CPA and enjoys playing the lottery. This year David won 10,000 in lottery scratch-off tickets. He spent 200 purchasing the tickets. Which statement is true regarding Davids winnings? a. David must include 9,800 in gross income. b. David must include the 10,000 in gross income and can deduct 200 as an itemized deduction not subject to the 2%-of-AGI limitation. c. David must include 10,000 in gross income and can deduct 200 as an adjustment to AGI. d. Davids winnings are not taxable.
Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?
Determine whether the taxpayer has income that is subject to taxation in each of the following situations: a. Capital Motor Company is going out of business. As a result, June is able to purchase a car for 12,000; its original sticker price was 25,000. b. Chuck is the sole owner of Ransom, Inc., a corporation. He purchases a machine from Ransom for 10,000. Ransom had paid 50,000 for the machine, which was worth 30,000 at the time of the sale to Chuck. c. Gerry is an elementary school teacher. She receives the Teacher of the Month Award for February. As part of the award, she gets to drive a new car supplied by a local dealer for a month. The rental value of the car is 400 per month. d. Payne has worked for Stewart Company for the last 25 years. On the 25th anniversary of his employment with Stewart, he receives a set of golf clubs worth 1,200 as a reward for his years of loyal service to the company. e. Anna enters a sweepstakes contest that was advertised on the back of a cereal box, and wins 30,000. The prize will be paid out in 30 annual installments of 1,000. She receives her first check this year. f. Terry buys an antique vase at an estate auction for 780. Upon returning home, she accidentally drops the vase and finds that a 100 bill had been taped inside it.
John owns a second home in Palm Springs, CA. During the year, he rented the house for $5,000 for 56 days and used the house for 14 days during the summer. The house remained vacant during the remainder of the year. The expenses for the home included $5,000 in mortgage interest, $850 in property taxes, $900 for utilities and maintenance, and $3,500 of depreciation. What is John's deductible rental loss, before considering the passive loss limitations? $200 $875 $2,500 $3,200 $0
llene rents her second home. During the year, llene reported a net loss of $10,700 from the rental. If llene is an active participant in the rental and her AGI is $142,500, how much of the loss can she deduct against ordinary income in the year? Multiple Choice ___ $10,700. ___ $6,950. ___ $3,750. ___ $0
Tin rents her beach house for 60 days and uses it for personal use for 30 days during the year. The rental income is $6,000 and the expenses are as follows: Mortgage interest $9,000 Real estate taxes 3,000 Utilities 2,000 Maintenance 1,000 Insurance 500 Depreciation (rental part) 4,000 Using the IRS approach, total expenses that Tin can deduct on her tax return associated with the beach house are: a.$6,000. b.$0. c.$8,000. d.$12,000.