Exam 6: Deductions and Losses: in General

Marsha is single, had gross income of $50,000, and incurred the following expenses: Charitable contribution \ 2,000 Taxes and interest on home 7,000 Legal fees incurred in a tax dispute 1,000 Medical expenses 3,000 Penalty on early withdrawal of savings 250 Her AGI is:

Paula is the sole shareholder of Violet, Inc.For 2019, she receives from Violet a salary of $300,000 and dividends of $100,000.Violet's taxable income for 2019 is $500,000.On audit, the IRS treats $100,000 of Paula's salary as unreasonable.Which of the following statements is correct?

Trade or business expenses of a self-employed taxpayer should be treated as:

If a taxpayer operates an illegal business, no deductions are permitted.

Alice incurs qualified moving expenses of $12,000 in 2019.If she is not reimbursed by her employer, the deduction is classified as a deduction for AGI.

Andrew, who operates a laundry business, incurred the following expenses during the year. ∙ Parking ticket of $250 for one of his delivery vans that parked illegally. ∙ Parking ticket of $75 when he parked illegally while attending a rock concert in Tulsa. ∙ DUI ticket of $500 while returning from the rock concert. ∙ Attorney's fee of $600 associated with the DUI ticket. What amount can Andrew deduct for these expenses?

Tommy, an automobile mechanic employed by an auto dealership, is considering opening a fast-food franchise.If Tommy decides not to acquire the fast-food franchise, any investigation expenses are:

The cost of legal advice associated with the preparation of an individual's Federal income tax return that is paid in 2019 is not deductible because it is a personal expense.