Given correct answer general Accounting question On March 1, 2024, Sarah started a consulting business byinvesting $25,000 in cash and office equipment worth$15,000. During the year, she withdrew $5,000 forpersonal use. The ending balance in her Statement ofOwner's Equity shows $42,000. What was her net incomeor loss for the year?a. $7,000 net incomeb. $2,000 net lossc. $7,000 net lossd. $2,000 net income

Step 1: Define Owner's Equity and Net IncomeOwner's Equity: It represents the owner's claim on the…

Answered: On March 1, 2024, Sarah started a…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 47P

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During the current year, Irving, an individual, had long-term capital losses of $2,000 and short-term capital losses of $1,500. If this is the first year Irving has experienced capital gains or losses, what amount of these losses may Irving deduct this year? Group of answer choices A.$3,500 B.$3,000 C.$1,750 D.$2,500
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ASLEY is in the business of purchasing accounts receivable from businesses at a discount and then collecting them. Last year, she purchased a $30,000 account receivable for $25,000. This year, the account was settled for $25,000. How much loss can Peggy deduct and in which year? a.$5,000 for the prior year. b.$5,000 for the prior year and $5,000 for the current year. c.$5,000 for the current year. d.$-0- for the current year.
Last year, lana purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected. a.$7,000 gain b.$3,000 loss c.$13,000 loss d.$2,000 gain
1.Charles, who is single and age 61, had AGI of $400,000 during 2020. He incurred the following expenses and losses during the year. Medical expenses before AGI floor$28,500State and local income taxes15,200Real estate taxes4,400Home mortgage interest5,400Charitable contributions14,800Unreimbursed employee expenses8,900Gambling losses (Charles had $7,400 of gambling income)9,800Compute Charles's total itemized deductions for the year. 2.For the following exchanges, indicate which qualify as like-kind property.a.lnventory of a sporting goods store in Charleston for land in Savannah.b.lnvestment land in Virginia Beach for office building in Williamsburg.c.Used automobile used in a business for a new automobile to be used in the business.d.Investment land in Paris for investment land in San Francisco.e.Shares of Texaco stock for shares of Exxon Mobil stock.
The following information is for Doug Santiago for the 2023 taxation year: • Doug sold shares of a qualified small business corporation (QSBC), for $480,000. The ACB of the shares was $187,000. and selling costs were $4,000. • Also, in 2023 Doug realized a business investment loss (before any adjustment) of $267,000. • At the end of 2023, Doug had a Cumulative Net Investment Loss (CNIL) balance of $2,300. • Doug has a 2019 net capital loss balance of $3,400 [(1/2)($6,800)] that he would like to use to minimize tax in 2023. • Doug claimed the capital gains deduction to eliminate a 2013 capital gain of $29,500, as well as a 2016 capital gain of $49,000. Required: • Doug has asked you to calculate his capital gains deduction for 2023 supported by all the necessary calculations. (Make sure to include all the steps and calculations).
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Discussion question 1. Aiden is married and has salary income of $80,000 and total itemized deductions is $30,000. During the year, he sold two investments resulting in a $5,000 long-term capital gain and a $15,000 short-term capital loss. He calculated his AGI to be $70,000 (80,000 -10,000) and his taxable income to be $40,000 (70,000-30,000). Based on the tax formula and the net capital loss rules, comment on whether or not the adjusted gross income and taxable income are correct. Explain and provide support for your position.
During the year (not a leap year), Anna rented her vacation home for 30 days, used it personally for 20 days, and left it vacant for 315 days. She had the following income and expenses: Rent income $ 7,000 Expenses Real estate taxes 2,500 Interest on mortgage 9,000 Utilities 2,400 Repairs 1,000 Roof replacement (a capital expenditure) 12,000 Depreciation 7,500 Compute Anna’s net rent income or loss and the amounts she can itemize on her tax return, using the court’s approach to allocating property taxes and interest. How would your answer in part (a) differ using the IRS’s method of allocating property taxes and interest?

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