Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 6, Problem 39P
To determine
Find out the amount of deductible expenses for Person F.
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Milt, a self-employed attorney, incurs the following expenses in 2019:
(Click the icon to view the expenses.)
Which of the expenditures listed above (if any) are deductible in 2019 by Milt? (Complete all input fields. Enter a "0" if an expense is not deductible.)
Business lunches for clients and prospective clients
Entertainment of professional associates in his home (immediately
following business meetings)
Country club dues (the club is used exclusively for business)
Total amount deductible in 2019
JUU
Data Table
Business lunches for clients and prospective clients
Entertainment of professional associates in his home (immediately
following business meetings)
Country club dues (the club is used exclusively for business)
Total
Print
Done
$
4,000
2,000
2,500
8,500
During the summer of 2019, college student Jason worked for his uncle, a painting contractor, for two weeks, and was paid $1,600 cash for his help painting a house for one of his uncle’s customers. At the end of 2019, his uncle filed a Form 1099MISC indicating he had paid non-employee compensation of $1,600 to Jason (copies of the form were sent to Jason and the IRS). When it came time to file his 2019 income tax return, the tax software indicated he had to pay self-employment tax (in addition to income tax) on the $1,600 payment received from his uncle. You did some research online and found one primary authority (only one), a Tax Court case (John A. and Mary L. Batok vs. Commissioner) that seemed to indicate a one-time job was not considered regular or continuous and thus did not rise to the level of a trade or business subject to self-employment tax. Contacting the IRS to ask how to handle this issue is not an option. Should Jason pay self-employment tax on the $1,600? Is there a…
Paul is self-employed as a dentist. He practices under the name "Paul J. Vance, DDS." Paul's
gross receipts during the year were $111,000. He uses the cash method of accounting. His
business deductible expense is $55458.
In June 2019, Armando decided to refurbish his office. This project was completed and the
assets placed in service on July 1. Armando's expenditures included $8,000 for new office
furniture, $6,000 for new dental equipment (seven-year recovery period), and $2,000 for a new
computer. Armando elected to compute his cost recovery allowance using MACRS. He did not
elect to use $179 immediate expensing, and he chose to not claim any bonus depreciation.
Tax return for 2020, how to compute depreciation expense.
Chapter 6 Solutions
Individual Income Taxes
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Classify each of the following expenditures paid...Ch. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Linda operates an illegal gambling operation....Ch. 6 - Prob. 16DQCh. 6 - Melissa, the owner of a sole proprietorship, does...Ch. 6 - Prob. 18DQCh. 6 - Blaze operates a restaurant in Cleveland. He...Ch. 6 - Prob. 20DQCh. 6 - Prob. 21DQCh. 6 - Ray loses his job as a result of a corporate...Ch. 6 - Lavinia incurs various legal fees in obtaining a...Ch. 6 - Prob. 24DQCh. 6 - Prob. 25DQCh. 6 - Shanna, a calendar year and cash basis taxpayer,...Ch. 6 - Prob. 27CECh. 6 - Maud, a calendar year taxpayer, is the owner of a...Ch. 6 - Vella owns and operates an illegal gambling...Ch. 6 - Printer Company pays a 25,000 annual membership...Ch. 6 - Stanford owns and operates two dry cleaning...Ch. 6 - Tobias has a brokerage account and buys on the...Ch. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Janice, age 32, earns 50,000 working in 2019. She...Ch. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Duck, an accrual basis corporation, sponsored a...Ch. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Terry traveled to a neighboring state to...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Brittany Callihan sold stock (basis of 184,000) to...Ch. 6 - Prob. 53PCh. 6 - Prob. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57CPCh. 6 - Prob. 58CPCh. 6 - Prob. 1RPCh. 6 - Prob. 2RPCh. 6 - Prob. 3RPCh. 6 - Which of the following is a deduction for AGI? a....Ch. 6 - Which of the following is not a deduction for AGI?...Ch. 6 - David is a CPA and enjoys playing the lottery....Ch. 6 - Prob. 4CPACh. 6 - Prob. 5CPACh. 6 - Prob. 6CPA
Knowledge Booster
Similar questions
- Joy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.arrow_forwardShanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement, Shanna pays 8,400 rent on April 1, 2019, for the 12 months ending March 31, 2020. a. How much is Shannas deduction for rent expense in 2019? b. Assume the same facts, except that the 8,400 is for 24 months rent ending March 31, 2021. How much is Shannas deduction for rent expense in 2019?arrow_forwardValentino is a patient in a nursing home for 45 days of 2019. While in the nursing home, he incurs total costs of 13,500. Medicare pays 8,000 of the costs. Valentino receives 15,000 from his long-term care insurance policy, which pays while he is in the facility. Assume that the Federal daily excludible amount for Valentino is 370. Of the 15,000, what amount may Valentino exclude from his gross income?arrow_forward
- Terry traveled to a neighboring state to investigate the purchase of two hardware stores. His expenses included travel, legal, accounting, and miscellaneous expenses. The total was 52,000. He incurred the expenses in June and July 2019. Under the following circumstances, what can Terry deduct in 2019? a. Terry was in the hardware store business and did not acquire the two hardware stores. b. Terry was in the hardware store business and acquired the two hardware stores and began operating them on October 1, 2019. c. Terry did not acquire the two hardware stores and was not in the hardware store business. d. Terry acquired the two hardware stores but was not in the hardware store business when he acquired them. Operations began on October 1, 2019.arrow_forwardIn December 2020, Ryan paid $31,230 for an insurance policy that covers his business property for accidents and casualties. Ryan is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Ryan deduct in 2020 in each of the following alternative scenarios?a. The policy covers the business property from March 1, 2021 – February 28, 2022.b. The policy covers the business property from November 1, 2020 – October 31, 2022.c. The policy covers the business property from December 1, 2020 – November 30, 2021.d. Assume that instead of paying an insurance premium, Ryan paid $31,230 in rent for Dec 1, 2020 – May 31, 2021. Please show excel workarrow_forwardDuring 2021 Jean underwent the following transactions: $100,000 for pain and suffering and $20,000 in punitive damages related to a workplace injury she suffered in 2020. Received 12 payments from an annuity in the amount of $3,000 a month for a total of $36,000. She originally purchased the annuity contract for $200,000 and began receiving payments when she turned 60 years old. Won a car with a fair market value of $30,000. Required: How much did Jean’s 2021 gross income increase as a result of the above transactions?arrow_forward
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