Exam 6: Business Expenses

Inventory valuation under UNICAP does not include costs for

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Business investigation expenses incurred by a restaurant owner who investigates but abandons plans to open a hobby mart.

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Cost of a hunting lodge available for employees use on a nondiscriminatory basis.

If an expense is reported on the tax return before it is reported on the financial accounting books

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -$2,000 of start-up expenses paid to open a suburban branch of an existing shoe store.

Corinne's primary business is writing music. She uses one room in her home exclusively and regularly for the activity. The office occupies 300 of the 1,500 square feet in her apartment. She earned $2,100 this last year from her music. Her expenses for the entire home were $9,000 for rent and $2,000 for utilities. What is her home office expense deduction this year?

Allison Corporation (marginal tax rate of 21%) has $44,000 of tax depreciation in the current year. It also has a $40,000 bad debt deduction. For financial accounting, it has a total depreciation deduction of $28,000 and adds $50,000 to its bad debt reserve, the first year it has established a reserve. Determine if the corporation has a deferred tax asset or a deferred tax liability and its amount.

Contrast business investigation, start-up, and organization expenses.

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Cleo spent $4,000 on organization costs for her business and $13,000 training staff. If the business is a calendar-year cash-basis business that starts operations on June 1, what is the current year's deduction for these expenses?

What are the rules regarding the deduction for transportation expenses related to foreign business travel?

In year 1, Braid Corporation, a calendar-year cash-basis corporation, bought office supplies for the next six months in October for $4,500, paid $6,000 for a three-year insurance policy beginning November 1, and borrowed $200,000 on a five-year 6 percent note receiving proceeds of $198,000 on December 1. What is Braid Corporation's total expense deduction in year 1 for these transactions?

Jonathan is a self-employed consultant with a qualifying office in his home. The gross income from his business is $18,000 and he has $14,000 of business expenses other than those for his home office. His home office occupies 20% of the square footage of his home and the total expenses for his home include: $12,000 for mortgage interest, $4,000 for property taxes, $3,600 for utilities, and $1,500 for homeowner's insurance. Depreciation for the business portion of his home is $500. How much can Jonathan deduct for his home office expenses?

If a spouse accompanies an employee on a business trip to help entertain customers, the spouse's travel expenses are deductible.

Travel away from home on business is defined as being away from home for:

Perez Corporation paid the following expenses: $14,000 country club dues and $8,000 business meals. How much can Perez deduct for these expenses?

Taylor Corporation manufactures lawn mowers. Its annual gross receipts are in excess of $25 million. It has 200 factory personnel, 25 office employees, and 10 sales persons. The cost of office staff is $1,000,000. How much of the cost of the office staff must be allocated to inventory.

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Rent paid for one-year by contract on November 1 by an accrual-basis taxpayer.

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Expenses for a vacation home rented for 275 days and used 40 days by the owner.

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -On November 1, 2018, Hernandez Corporation (a cash-basis, calendar-year taxpayer) signed a 36-month lease with Taylor Realty Corporation for rental office space. The market rental rate for this office space is $2,000 per month but Hernandez was able to rent it for $1,900 per month by agreeing to prepay the rent for the entire 36-month period. How much can Hernandez deduct in 2018 rent expense?

All of the following expenses are deductible except: