Questions from Federal Taxation

Q: How are mixed-use expenditures and expenses related to mixed-

How are mixed-use expenditures and expenses related to mixed-use assets treated for tax reporting?

Q: What is the difference between a trade or business and a production

What is the difference between a trade or business and a production of income activity and why is it important to distinguish a trade or business activity from a production of income activity?

Q: What requirements must be met to deduct a trade or business expense

What requirements must be met to deduct a trade or business expense? an expense related to the production of income?

Q: When are capital expenditures deductible?

When are capital expenditures deductible?

Q: How do you distinguish a currently deductible expenditure from a capital expenditure

How do you distinguish a currently deductible expenditure from a capital expenditure? Give examples of each type of expenditure.

Q: Why are start-up costs related to the investigation of a

Why are start-up costs related to the investigation of a business opportunity treated differently depending on the current trade or business of the taxpayer?

Q: Explain the rationale for not allowing a deduction for political and lobbying

Explain the rationale for not allowing a deduction for political and lobbying expenditures.

Q: Explain why the income tax concepts support a deduction for some of

Explain why the income tax concepts support a deduction for some of the expenses of an illegal business.

Q: What is the purpose of the standard deduction for individuals?

What is the purpose of the standard deduction for individuals?

Q: One of Adam Smith's four criteria for evaluating a tax is certainty

One of Adam Smith's four criteria for evaluating a tax is certainty. Does the income tax definition of gross income promote certainty in the U.S. tax system? Explain.