Exam 6: Self-Employed Business Income Line 12 of Form 1040 and Schedule C

In June 2016,Kelly purchased new equipment for $26,000 to be used in her business.Assuming Kelly has net income from her business of $75,000 prior to the deduction,what is the maximum amount of cost recovery Kelly can deduct rounded to the nearest dollar,assuming she does not elect §179 expense or bonus depreciation?

Which of the following statements is false with respect to the standard mileage rate?

Which of the following individuals can deduct his or her education expenses?

For a cash-basis taxpayer,any account receivable that is not collected can be written off as a bad debt.

Deductible education expenses include all of the following except:

Terry,a CPA,flew from Dallas to New York to attend a conference.The conference lasted four days.Then she took three days of vacation to go sightseeing.Terry's expenses for the trip are as follows: Calculate Terry's travel expense deduction.

If property is inherited,the property's basis for purposes of depreciation is the same as the decedent's basis.

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

The adjusted basis of an asset is:

Taxpayers must use the mid-month convention when more than 40% of the personal property is placed in service during the last three months of the tax year.

Cole purchased a car for business and personal use.In 2016,he used the car 60% for business 13,000 total use miles)and used the standard mileage rate to calculate his vehicle expenses.He also paid $1,500 in interest and $360 in county property tax on the car.What is the total business deduction related to business use of the car rounded to the nearest dollar?

Under MACRS,5-year property includes:

§179 expense is available for all of the following business assets except:

Oscar bought an $800,000 apartment building on July 28,2016.On August 15,2016,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 2016?

List and define the criteria for an expenditure to be deductible on Schedule C.

Marcus has two jobs.He works as a night auditor at the Midnight Motel.When his shift at the motel is over,he works as a short order cook at the Break-An-Egg Restaurant.On a typical day,he drives the following distances: Home to Midnight Motel 4 miles Midnight Motel to restaurant 12 miles Restaurant to home 8 miles How many miles per day would qualify as transportation expenses for tax purposes?

Patricia,a professional gambler,had the following income and expenses in her business: How much net income must Patricia report from this business?

Katherine earned $100,000 from her job at a local business in 2016.She also had $42,000 in self-employed consulting income.What is the amount of her self-employment tax rounded to the nearest dollar?

Tonia acquires the following 5-year class property in 2016: Asse t Date of Acquisition Cost Tonia does not elect §179 or bonus depreciation.Tonia has $300,000 of taxable income from her business.Determine her total cost recovery deduction for the year.

The standard mileage rate encompasses depreciation or lease payments,maintenance and repairs,gasoline,oil,insurance,and vehicle registration fees.