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Newton, a business owner, signed a ten-year lease beginning in July of 2017, and immediately paid rent for the remainder of 2017, all of 2018, and...
Newton, a business owner, signed a ten-year lease beginning in July of 2017, and immediately paid rent for the remainder of 2017, all of 2018, and all of 2019. How much of the rent paid at the lease signing can be declared as a business expense on Schedule C of Newton's 2017 tax return?
a.All of these choices are correct.
b.None of these choices are correct.
c.The July 2017 - June 2018 portion only.
d.The 2017 portion only.
Rebecca owns and runs an auto repair shop that is assessed an environmental fine of $2,500 by the state government for failing to properly dispose of used engine oil. Rebecca incurs $1,500 in legal fees to fight this assessment, but does not prevail. She also contributes $2,000 to the political campaign of a gubernatorial candidate who is a lawyer by profession and who specifically promises to simplify the environmental ordinance under which Rebecca's fine was assessed. Considering the above facts, what total amount is deductible on Rebecca's business tax return?
a.$1,500
b.$3,500
c.$0
d.$6,000
Aman, a sole proprietor and rental property owner, had the following expenses in 2017:
Payment to tax lawyer for advice related to business tax liability$1,000Property taxes paid on rental home2,000Management fee for Aman's retirement portfolio500Specify whether each expense would be deducted for adjusted gross income (AGI) or from AGI on Aman's 2017 tax return.
Tax LawyerProperty TaxesManagement Fee
a.For FromFrom
b.For ForFrom
c.From ForFor
d.From FromFor
A sale between which of the following could trigger a gain or a loss for federal tax purposes?
a.Husband and wife
b.Majority shareholder and corporation
c.Cousin and cousin
d.Ancestor and descendent
Glenn and Mary's house was damaged by a hurricane in 2017. The fair value of their home before the hurricane was $150,000. After the hurricane, the fair value of their home was $125,000. They received $10,000 from their homeowners' insurance policy. What is their casualty loss deduction for 2017, if their adjusted gross income was $40,000?
a.$10,900
b.$11,000
c.$15,000
d.$14,900
Which of the following is correct about depreciation under federal tax law?
- The recovery period is longer than the useful life of the asset.
- There are different recovery periods for new and used property.
- Salvage values are ignored.
a.I, II, and III
b.I and II only
c.II only
d.III only
Joe purchased a van on February 1, 2017 for use in his business, Crew Airport Transport. The van was purchased for $30,000, has an estimated useful life of 10 years, and a salvage value of $2,000. No other assets were put into service that year. Joe does not take § 179 or additional first year depreciation. What is Joe's MACRS depreciation for the van for 2017?
Click here to access of the Cost Recovery Tables.
a.$2,567
b.$6,000
c.$10,500
d.$10,267
In 2017, Dolly purchased and placed into service qualifying depreciable property at a total cost of $2,280,000. Dolly has elected to take the § 179 deduction. What is Dolly's § 179 deduction for 2017 (assuming business income = $1,090,000)?
a.$260,000
b.$1,770,000
c.$0
d.$510,000
