Exam 6: Business Expenses

In 2018, Jasmin loaned her friend Janelle $5,000 to invest in various stocks.Janelle signed a note to repay the principal with interest.In 2019, Janelle made risky stock investments and incurred large losses.In late 2019, Janelle declared personal bankruptcy and Jasmin was unable to collect any of her loan.Jasmin had no other gains or losses in 2018 or 2019.Her income from wages in both 2018 and 2019 was $50,000.The result is:

In 2019, all corporations with at least $10 million in assets will be required to file Form 1120, Schedule UTP with their tax returns.

Which of the following is not included as part of ASC 740?

Donald, a sole proprietor, lived in Chicago and chose to commute to his office in Rockford in 2019.He drove 55 miles each way; tolls were $4, and parking $6.Generally he spent $12 on lunch while in Rockford.How much of these expenses can Donald deduct as travel away from home expenses?

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?

All of the following expenses are deductible except:

For transportation expenses for foreign travel of less than one week to be fully deductible, the days spent on business must exceed personal days.

Waldo, a sole proprietor, 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 2019?

Attendance at business-related seminars or meetings would be deductible for all of the following except:

The more-likely-than-not standard

For financial accounting purposes, the future tax savings expected from a net operating loss carryforward is reported as a deferred tax liability.

Chico Corporation, a calendar-year accrual-basis corporation, paid $3,000 on April 1 for a property insurance policy for the next three years, prepaid six months interest of $450 on November 1, and paid $2,000 rent for December and January on December 1.What is his deduction in the current year for these expenses?

Which of the following business expenses is not deductible?

A deferred tax asset is the result of the taxes paid exceeding the tax expense on the financial statements.

A taxpayer cannot take a deduction for a disputed amount until the amount in dispute is settled.

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

All of the following would normally result in permanent differences between tax and financial accounting except:

Donald, a sole proprietor, worked in Chicago but had to go to Rockford in March for the day on a business assignment.He drove 55 miles each way.Tolls were $4 and parking $6.He had lunch while there at a cost of $12.How much are Donald's deductible expenses in 2019?

John, a rental car dealer on Miami Beach, is considering opening a beauty salon in San Francisco.After spending $8,000 investigating such possibilities in San Francisco, John decides not to open the salon.As a consequence, the $8,000 is:

Expenses must be ordinary, necessary, and reasonable to be fully deductible.