![]() ![]() ![]() Which payment is not a capital expenditure?Ĭost of rewiring a building to install a new computer.Ī payment made to eliminate competition for 5 years.Ī payment to have machinery moved from one location to another. ![]() E, a sole proprietor, made the following payments in the current year. The entertainment took place directly before or after a business discussion. You had more than a general expectation of getting income or some other specific business benefit. You did engage in business with the person during the entertainment period. The main purpose of the entertainment was the active conduct of business. Which of the following elements is not part of the directly related test for entertainment? Meals and entertainment while traveling away from home on business and entertaining customers at your place of business. Meals and entertainment while traveling away from home on business.Įntertaining customers at your place of business. The 50% limit on deductibility of business-related expenses applies to which of the following? It is deductible to the amount of the reasonable value of Clark's services. It is deductible up to the amount of the next highest paid player. What is the most likely treatment of his salary upon audit of the Metropolis Superheroes by the IRS? His salary is twice that of the next highest-paid player in the league, even though his performance is below average for a quarterback. He performs no services other than playing as quarterback for the team. Clark, quarterback for the Metropolis Superheroes, Inc., football team, is also the majority shareholder. Wages paid to employees for constructing a new building to be used in the business. Lump-sum payment made to the beneficiary of a deceased employee that is reasonable in relation to the employee's past services. Reasonable salary paid to a corporate officer owning a controlling interest for services she rendered. Vacation pay paid to an employee when the employee chooses not to take a vacation. ![]() None of the answers are correct $13,000 All of the following payments made to employees would be currently deductible as business expenses except ABC paid $30,000 in June for the entire 5-year term. The second lease started July 1, 2017, and was for 5 years at $6,000 per year rent. ABC paid $30,000 in January for the entire 3-year term. The first lease started January 1, 2017, and was for 3 years at $10,000 per year rent. None of the answers are correct $60,000 ABC Corp. What rent expense may Clyde claim in 2017? Clyde then began to make monthly payments of $5,000 starting on July 1, 2017, and continuing on the first of the month for the balance of 2017. Clyde paid the first 2 years' rent in advance in May 2015. He leased a small warehouse in 2015 for $60,000 per year for a 3-year term. $4,100 $1,200 Clyde operated a food distribution business. What amount of educational expense can Baker deduct on Form 1040, Schedule C, Profit or Loss From Business? While in Spain, Baker spent an average of $100 per day on accommodations, local travel, and other incidental expenses, for total expenses of $2,800. Baker's round-trip airfare to Spain was $600. While on a 4-week vacation in Spain, Baker took a 5-day seminar on Spanish business practices that cost $700. $75 $75 Baker, a sole proprietor CPA, has several clients that do business in Spain. What is the total amount Hal can deduct as business gifts? To show his appreciation to another customer for his business, Hal took the customer to a football game. Earlier in the year, Hal had given a video game to the 10 year old son of one of the owners. Each of the owners took the champagne home. $750 $750 On New Year's Eve, Hal sent three bottles of champagne to the three owners of the Day & Night Cleaners to thank them for their business during the year. What is the amount of Bobby's expenses that are deductible for 2017? Meal expenses incurred while meeting with clients Rental payments for the next 2 years (i.e., 20)Ĭountry club dues (Bobby frequently entertains clients at the country club) During 2017, he incurred the following expenses: ![]()
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