Exam 6: Self-Employed Business Income

Nancy purchased a computer on July 15, 2015, for $5,000. The computer was used 70% of the time in her business and the rest of the time her children used the computer to surf the Web. In 2016, the computer was used 40% for business and 60% for personal use. What are the cost recovery deductions for 2015 and 2016? (No §179 or bonus). Is there any recapture of depreciation in 2016?

Bob took a business trip from Chicago to London. He was away 12 days of which he spent six days on business (including two travel days) and six days vacationing. His expenses are as follows: Calculate Bob's travel expense deduction.

Oscar bought an $800,000 apartment building on July 28, 2015. On August 15, 2015, he purchased $300,000 of 5-year class assets. Oscar elects to take the maximum expense on every asset. What is the maximum cost recovery deduction Oscar can take in 2015?

If an activity is considered a hobby, which of the following is true?

Deductible education expenses include all of the following except:

Beau earned $25,000 of net earnings from a tax preparation business that he runs during tax season. He also earned a salary of $100,000 from his full-time job. How much self-employment tax must he pay for 2015? (Round calculations to the nearest dollar)

The luxury auto limits on depreciation must be reduced if business use is less than 100%.

Depreciation is allowed for every tangible asset (except land) used either in a trade or business or for the production of income.

On April 23, 2015, Bailey purchased an automobile for $25,000. The car is used 80% for business and 20% for personal use. What is the cost recovery deduction for 2015 and 2016 assuming the 50% bonus was taken? (Round answers to the nearest dollar)

Ted purchased a vehicle for business and personal use. In 2015, Ted used the vehicle 70% for business (10,000 business miles) and used the standard mileage rate to calculate his vehicle expenses. Ted also paid $1,200 in interest and $380 in county property tax on the car. What is the total business deduction related to business use of the car in 2015?

Shante is employed by a local pharmaceutical company where she earned $48,000 in 2015. During the year, she also had self-employment income of $18,000. Her self-employment tax rounded to the nearest dollar is:

Which of the following is not a "trade or business" expense?

Della purchased a warehouse on February 25, 2015, for $350,000. $45,000 of the price was for the land. What is her cost recovery deduction for 2015 rounded to the nearest dollar?