Questions from Federal Taxation

Q: During 2021, Rick and his wife, Sara, had the

During 2021, Rick and his wife, Sara, had the following items of income and expense to report: Gross receipts from business ……………………………………………………………..$400,000 Business expenses ………………………………………………………………...

Q: Jed, age 55, is married with no children. During

Jed, age 55, is married with no children. During 2021, Jed had the following income and expense items: a. Three years ago, Jed loaned a friend $10,000 to help him purchase a new car. In June of the cu...

Q: On November 4, 2019, Blue Company acquired an asset (

On November 4, 2019, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2019 and 2020, respectively, Blue deducted $642 and $5,128 of cost re...

Q: Debra acquired the following new assets during 2021. /

Debra acquired the following new assets during 2021. Determine Debra’s cost recovery deductions for the current year. Debra does not elect immediate expensing under § 179...

Q: Lori, who is single, purchased 5-year class property

Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $420,000 on May 20, 2021. Lori expects the taxable income derived from her business (before considering...

Q: Olga is the proprietor of a small business. In 2021,

Olga is the proprietor of a small business. In 2021, the business’s income, before consideration of any cost recovery or § 179 deduction, is $250,000. Olga spends $620,000 on new 7-year class assets a...

Q: On June 5, 2020, Javier Sanchez purchased and placed in

On June 5, 2020, Javier Sanchez purchased and placed in service a new 7-year class asset costing $560,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landsca...

Q: On October 15, 2021, Jon purchased and placed in service

On October 15, 2021, Jon purchased and placed in service a used car. The purchase price was $38,000. This was the only business use asset Jon acquired in 2021. He used the car 80% of the time for busi...

Q: George is a U.S. citizen who is employed by

George is a U.S. citizen who is employed by Hawk Enterprises, a global company. Beginning on June 1, 2021, George began working in London. He worked there until January 31, 2022, when he transferred t...

Q: On March 15, 2021, Helen purchased and placed in service

On March 15, 2021, Helen purchased and placed in service a new Escalade. The purchase price was $62,000, and the vehicle had a rating of 6,500 GVW. The vehicle was used 100% for business. a. Assuming...