MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
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Question
Chapter 6, Problem 33P
To determine
Indicate the tax effect of Person P’s racing income and expenses.
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Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering
some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny
reported the following income and expenses from her nights at the track:
Prize money
Expenses:
Transportation from her home to the races
Depreciation on the dirt-track car
$ 2,500
1,000
4,000
Entry fees
Oil, gas, supplies, repairs for the dirt-track car
What are the tax effects of Penny's racing income and expenses assuming that the racing activity is a hobby for Penny?
Penny's racing income
Penny's racing expense
Gross income for tax
3,500
2,050
Jamie has an undergraduate degree in finance and is employed full-time by a bank. She is taking courses at a local university leading to an MBA degree.
Is the full cost of this education deductible to her?
If so, what limitations are imposed on the deduction?
Asshish is a medical doctor and a scientist. He works at a local hospital in the mornings, attending to patients.
At lunchtime he takes a train to the local university where he works in a research laboratory. At the end of the
day, he takes the train home.
Advise Asshish as to the tax deductibility of the train fares.
O The train fare from the university to his home will not be deductible as it is a private or domestic expense
O The train fare from the university to his home will be deductible as it is necessary to put him in a position to earn the
income
O The train fare from the university to his home will not be deductible as it is a fringe benefit tax
O The train fare from the university to his home will be deductible as it is directly connected to his income exertion
Chapter 6 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Ch. 6 - It has been suggested that tax policy favors...Ch. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Explain why Congress allows self-employed...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Describe the mechanical limitation on the...Ch. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Jake is a retired jockey who takes monthly trips...Ch. 6 - Frank paid 3,700 in fees for an accountant to...Ch. 6 - Contrast ceiling and floor limitations, and...Ch. 6 - Prob. 18DQCh. 6 - Prob. 19DQCh. 6 - Explain how the standard deduction is rationalized...Ch. 6 - Prob. 21DQCh. 6 - Prob. 22DQCh. 6 - Prob. 23DQCh. 6 - Prob. 24PCh. 6 - Don Juan, a single taxpayer, is the sole owner of...Ch. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Lionel is an unmarried law student at State...Ch. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - In each of the following independent cases,...Ch. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - This year Tim is age 45 and is considering...Ch. 6 - Doctor Bones prescribed physical therapy in a pool...Ch. 6 - Charles has AGI of 50,000 and has made the...Ch. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - This year Randy paid 28,000 of interest. (Randy...Ch. 6 - This year, Major Healy paid 40,000 of interest on...Ch. 6 - Prob. 42PCh. 6 - Calvin reviewed his cancelled checks and receipts...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Stephanie is 12 years old and often assists...Ch. 6 - Roquan, a single taxpayer, is an attorney and...Ch. 6 - Prob. 50PCh. 6 - This year Evan graduated from college and took a...Ch. 6 - Read the following letter and help Shady Slim with...Ch. 6 - Jeremy and Alyssa Johnson have been married for...Ch. 6 - Prob. 54CPCh. 6 - Joe and Jessie are married and have one dependent...
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