Question

26. 27. 28

26. Are any of the following losses deductible an individual's income tax return? If so, ish loss deductible "for" or "from" AGI? Explain cach loss. Amount 3.000 Loss Loss on sale of stock in an individual's wholly-owned business corporation Hobby loss in excess of hobby gross income Gambling losses in excess of gambling winnings Loss on sale of stock in individual's Investment portfolio Decline in value of stock held in individual's investment portfolio Loss on sale of personal automobila Total 9,000 7,000 2.000 $33.000 . 27. Which of the following trade or business expenditures of Ajax Inc. are deductible on its current year tax return? If an expenditure is not deductible, explain why it is not a valid deduction Amount $400,000 250,000 1,400 16,000 Expenditure Salaries and wages to employees Purchase of new office building Payment of illegal parking fines of the company's President Payment of wedding expenses for President's daughter's wedding Entertainment expenses related to company business Interest on money borrowed to buy tax-exempt securities Total expenditures 25,000 9.000 $700.000 are of 28. Indicate whether the following expenditures are deductible for AGI, from AGI or not deductible. a. Medical expenses of individual taxpayer b. Safe deposit box rental for business c. Interest expense on business loan d. Investment counseling fees incurred by individual investor Gambling losses to extent of gambling winnings of individual gambler not involved in gambling business

it doesnt let me eddit the questins. I need 27 and 28 if you can, but 27 is my priority

Answer 1

1. Salaries and Wages to Employees are deductible

2. purchase of new office building is not deductible because it is a Capital Expenditure and Depreciation can be claimed on such Capital Expenditure

3. The Illegal Parking Fines are Not Deductible on Basis of Two reasons -

A). According to IRS, you cannot get tax deductions for fines or penalties paid to a government (the U.S. or foreign, federal or local). This is because the IRS does not want to incentivize citizens to break the law, and also, tickets are not necessary expenses for the production of income (only necessary expenses are tax-deductible).

B) It would be the personal expense of the president and the act of illegal parking is against the interest of the organization. and shall be treated as a personal expense and it is disallowed

4. Entertainment Expenses relating to business are allowed

5. The Service has stated that a showing of the taxpayer's purpose to use borrowed funds to purchase or carry tax-exempt securities is required before an interest deduction will be disallowed.