Exam 6: Business Expenses

Isabel owns a vacation home in Hawaii. During the year she rented it out for one week and used it for personal purposes three weeks. Her expenses directly related to renting out the property were: rental commission ($30) and maid service ($25). The allocated portion of taxes and interest was $400. Income from the rental was $300. Isabel should:

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Entertainment associated with a business meeting in 2018.

Fabricio, Inc. is an accrual-basis corporation. It ages its receivables to calculate the addition to its reserve for bad debts. The following were reported during the current year: The amount deductible for bad debt expense on Fabricio's tax return for the current year is:

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Which of the following is not required to deduct an expenditure as a business expense?

Which of the following may qualify as a deductible business expense?

Rachel owns a vacation condo in Colorado. During the year she rented it for 14 days for $2,800. Rachel and her family members used the condo for 65 days during the year and it was vacant the rest of the year. The total expenses for the year were: $8,000 interest expense, $2,000 property taxes, and $1,800 utilities. How much net rental income must Rachel report on her tax return for the year?

Differentiate a deferred tax asset from a deferred tax liability.

What are three types of expenses for which a deduction is denied?

The information in FAS 109 and the FIN 48 interpretation of FAS 109, have been incorporated into the Accounting Standards Codification Section 740.

Nick owns a home in Daytona Beach, Florida where his wife and children live. He recently accepted a full-time job in Tampa. During the week, Nick lives in a rental apartment in Tampa and on weekends he drives home to be with his family in Daytona Beach. If Nick continues to maintain and pay all of the expenses of the residence in Daytona, where is Nick's tax home?

Carl, an employee of a Miami CPA firm, was sent to work in Tampa for eight months on March 1, 2018, on a financial audit. His monthly transportation expenses were $400, his monthly lodging was $1,200, and his meals were $800 per month. At the end of the sixth month, his employer determined that the audit was going to continue for eight more months due to an SEC investigation. Carl's employer reimburses him for all of the expenses. How are these expenses and reimbursements treated by Carl and his employer?

Claudia went to the West Coast to attend several business meetings with clients. She flew out on Wednesday afternoon, spent all day Thursday, Friday, Monday and Tuesday attending meetings, and then spent the rest of the week touring the area, returning home on Saturday. She spent $800 on airfare, $1,600 on hotels (10 nights at $160 per night), $400 for a rental car ($40 per day from Wednesday night through Saturday of the following week), and $300 for meals ($30 per day from Thursday through the following Friday and $15 on each of her travel days). What is her allowable deduction for travel away from home?

Gina flew from Miami to San Diego for a business meeting. The meeting lasted four days and she stayed in San Diego for two additional days to do some sightseeing. With respect to the expenses of the trip, Gina should:

Other Objective Questions Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid. -Which of the following expenditures would not be deductible as a business expense?

Which of the following taxes cannot be deducted by a business?

Waldo bought two tickets for a Packers game on Ebay for $400. The tickets had a face value of $50 each. He took a client to the game and they had a dinner afterwards where they discussed business. The cost of the dinner was $70. What is Waldo's deduction for these expenses if they were incurred in 2017?