Questions from Individual Taxation

Q: Rebecca is a calendar year taxpayer who operates a business. She

Rebecca is a calendar year taxpayer who operates a business. She made the following business-related expenditures in December of year 0. Indicate the amount of these payments that she may deduct in ye...

Q: Kimberly is a self-employed taxpayer. She recently spent $

Kimberly is a self-employed taxpayer. She recently spent $1,000 for airfare to travel to Italy. What amount of the airfare is deductible in each of the following alternative scenarios? a. Her trip wa...

Q: This year (year 0) Elizabeth agreed to a three-

This year (year 0) Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting fir...

Q: Travis is a professional landscaper. He provides his clients with a

Travis is a professional landscaper. He provides his clients with a one-year (12-month) warranty for retaining walls he installs. In June of year 1, Travis installed a wall for an important client, Sh...

Q: Adam elects the accrual method of accounting for his business. What

Adam elects the accrual method of accounting for his business. What amount of deductions does Adam recognize in year 0 for the following transactions? a. Adam guarantees that he will refund the cost...

Q: Ryan is self-employed. This year Ryan used his personal

Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,500 for gasoline on these trips. His depreciation on the car if he was using it fully for bus...

Q: Heather paid $15,000 to join a country club in

Heather paid $15,000 to join a country club in order to meet potential clients. This year she paid $4,300 in greens fees when golfing with clients. Under what circumstances, if any, can Heather deduct...

Q: Assume Sarah is a cash-method calendar-year taxpayer,

Assume Sarah is a cash-method calendar-year taxpayer, and she is considering making the following cash payments related to her business. Calculate the after-tax cost of each payment assuming she has a...

Q: Renee manufactured and sold a “gadget,” a specialized asset used

Renee manufactured and sold a “gadget,” a specialized asset used by auto manufacturers that qualifies for the domestic production activities deduction. Renee incurred $15,000 in direct expenses in the...

Q: Andrew is considering starting a business of constructing and selling prefabricated greenhouses

Andrew is considering starting a business of constructing and selling prefabricated greenhouses. There are three very different methods to constructing these greenhouses, and each method results in di...