Which of the following is not allowed as a business deduction for income tax purposes? Choose...
Which of the following is not allowed as a business deduction for income tax purposes?
Choose the correct answer.
A.
Interest expense on a business bank loan
B.
Capital Cost Allowance (CCA)
C.
Depreciation
D.
Life insurance for a proprietor, which is a required condition for the business bank loan
Homework Answers
| Depreciation is not allowed as a business deduction for income tax purposes. |
| Capital Cost Allowance (CCA) is the alternative deduction for Depreciation which is for wear and tear of asset is allowed as a business deduction for income tax purposes. |
| Option C Depreciation is correct |
Add Answer to:
Which of the following is not allowed as a business deduction
for income tax purposes?
Choose...
The capital cost allowance (CCA) deduction for any given taxation year is ________. Choose the correct...
The capital cost allowance (CCA) deduction for any given taxation year is ________. Choose the correct answer. A. not an optional amount and is equal to its undepreciated capital cost (UCC) balance multiplied by the prescribed rate indicated in the Income Tax Act B. reduced by the cost of assets that have been sold or otherwise disposed of C. equal to the amount of depreciation and amortization claimed on its financial accounting reports for the year D. an optional amount...
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross...
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales $35,000,000 Cost of Goods Sold 22,000,000 Gross Profit 13,000,000 Interest Expense- regular 7,000,000 Depreciation 1,000,000 Interest Expense Floor Plan 200,000 All other deductions 3,000,000 Total Business Deductions 11,200,000 Net Income 1,800,000 Interest Income Earned 40,000 Capital Gain - non-business 50,000 Taxable Income before 163 limit $1,890,000 Answer:
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross...
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales $35,000,000 Cost of Goods Sold 22,000,000 Gross Profit 13,000,000 Interest Expense- regular 7,000,000 Depreciation 1,000,000 Interest Expense Floor Plan 200,000 All other deductions 3,000,000 Total Business Deductions 11,200,000 Net Income 1,800,000 Interest Income Earned 40,000 Capital Gain - non-business 50,000 Taxable Income before 163j limit $1,890,000
Which of the following statements is true regarding the deduction for qualified business income (QBI)? A....
Which of the following statements is true regarding the deduction for qualified business income (QBI)? A. The deduction changes the calculation of self-employment tax. B. Taxable income is reduced below zero by the deduction. C. The deduction is not limited by income or service trade or business. D. A sole proprietor may be able to deduct up to 20% of QBI.
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross...
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales - - - - - - - - - - - - - - - - - - Cost of Goods Sold -- - Gross Profit $35,000,000 22,000,000 13,000,000 5,000,000 1,000,000 - - - - - - - - - - - - - - - - - - - - - - - - - - Interest Expense- regular Depreciation - -...
Which of the following items would be added to a corporation's GAAP income to determine Net...
Which of the following items would be added to a corporation's GAAP income to determine Net Income for Tax Purposes? Choose the correct answer. A. a federal income tax refund B. terminal losses C. CCA that exceeds GAAP amortization D. 50% of business meals and entertainment
Which of the following is not true of Qualified Business Income Deduction (QBID)? Choose one answer....
Which of the following is not true of Qualified Business Income Deduction (QBID)? Choose one answer. a. Before any limits, QBID is 20% of the qualified business income of all qualified business activities. b. QBID can never be claimed for Specified Service Business Activities (SSTBs) c. Business losses reduce the QBID for other business with profit. d. QBID is generally 20% of the total qualified business income.
Accounting for income tax Tulip Ltd commenced business on 1 July 2018, with share capital of...
Accounting for income tax Tulip Ltd commenced business on 1 July 2018, with share capital of $700,000. The following information is available for the year ended 30 June 2019: Calculation of profit for the year ended 30 June 2019 $ $ Income: Revenue 1 430 000 Royalty (exempt from income tax) 10 000 Expenses: Cost of sales 725 000 Advertising expense 204 000 Annual leave expense 24 000 Depreciation – equipment 35 000 Depreciation – motor vehicles 20 000 Doubtful...
FOR INCOME TAX PURPOSES, THE SALE OF AN UNICORPORATED BUSINESS DOES WHICH OF THE FOLLOWING GENERALLY...
FOR INCOME TAX PURPOSES, THE SALE OF AN UNICORPORATED BUSINESS DOES WHICH OF THE FOLLOWING GENERALLY IS SUBJECT TO CAPITAL GAIN TREATMENT IS CONSIDERED AS THE SALE OF ONE ENTITY TREATED AS A CAPITAL ASSET IS CONSIDERED AS THE SALE OF ONE ENTITY WITH SOME PORTION TREATABLE AS CAPITAL GAIN AND ANOTHER SUBJECT TO ORDINARY INCOME TREATMENT REQUIRES THE SELLER TO COMPUTE GAINS AND LOSSED ON EACH ASSET SOLD WITH THE BUSINESS
For a business with no interest income, what is the limitation on business interest deductions? What...
For a business with no interest income, what is the limitation
on business interest deductions?
What businesses are not subject to this limitation?
For a business that is subject to the limitation, what benefit
can the business get from interest payments that exceed the limit?
Give an example. For this question please refer to the screen shot
posted.
Limitation on Business Interest Deductions THE KEY FACTS BUSINESS INTEREST LIMITATION • The deduction of business interest expense is limited to business...
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales $35,000,000 Cost of Goods Sold 22,000,000 Gross Profit 13,000,000 Interest Expense- regular 7,000,000 Depreciation 1,000,000 Interest Expense Floor Plan 200,000 All other deductions 3,000,000 Total Business Deductions 11,200,000 Net Income 1,800,000 Interest Income Earned 40,000 Capital Gain - non-business 50,000 Taxable Income before 163 limit $1,890,000 Answer:
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales $35,000,000 Cost of Goods Sold 22,000,000 Gross Profit 13,000,000 Interest Expense- regular 7,000,000 Depreciation 1,000,000 Interest Expense Floor Plan 200,000 All other deductions 3,000,000 Total Business Deductions 11,200,000 Net Income 1,800,000 Interest Income Earned 40,000 Capital Gain - non-business 50,000 Taxable Income before 163j limit $1,890,000
Calculate the allowed interest expense deduction under IRC 163j based on the following income statement: Gross Sales - - - - - - - - - - - - - - - - - - Cost of Goods Sold -- - Gross Profit $35,000,000 22,000,000 13,000,000 5,000,000 1,000,000 - - - - - - - - - - - - - - - - - - - - - - - - - - Interest Expense- regular Depreciation - -...
For a business with no interest income, what is the limitation
on business interest deductions?
What businesses are not subject to this limitation?
For a business that is subject to the limitation, what benefit
can the business get from interest payments that exceed the limit?
Give an example. For this question please refer to the screen shot
posted.
Limitation on Business Interest Deductions THE KEY FACTS BUSINESS INTEREST LIMITATION • The deduction of business interest expense is limited to business...
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