14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year...
14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year in which the loan is repaid. True or False
15) In general, a CPA on the cash basis method will never have a bad debt deduction. True or False
16) A cash-basis taxpayer may deduct prepaid business expenses currently regardless of the period of time to which the expenses relate. True or False
17) A cash-basis taxpayer must always include checks in income in the year received. True or False
Homework Answers
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14) For a cash method taxpayer, expenses paid with borrowed
funds are deductible in the year...
13) A taxpayer may use a cash basis for one business and an accrual basis for...
13) A taxpayer may use a cash basis for one business and an accrual basis for another business. True or False 14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year in which the loan is repaid. True or False 15) In general, a CPA on the cash basis method will never have a bad debt deduction. True or False 16) A cash-basis taxpayer may deduct prepaid business expenses currently regardless of the period...
1) Fred and Phyllis Black are a married couple with no children. On June 15, 2019,...
1) Fred and Phyllis Black are a married couple with no children. On June 15, 2019, Fred died. Phyllis has not remarried. For 2019, what is Phyllis' most favorable filing status? 2) Fred and Phyllis Black are a married couple with no children. On June 15, 2019, Fred died. In 2020, Phyllis has not remarried and has a dependent son who continues to live with her. For 2019, what is Phyllis' most favorable filing status for 2020? 3) Fred and...
On Dec. 15, 2019, Julie’s Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest...
On Dec. 15, 2019, Julie’s Tax Prep, a cash-method taxpayer,
prepaid $4,000 worth of deductible interest on a business loan. The
interest won’t accrue until January 2020.
Julie’s Tax Prep will be displaying for the first time at a
trade show in July 2020. On Dec. 16, 2019, Julie’s prepaid the
$8,000 trade show booth rental expense. The payment isn’t due until
May 2020, and use of the booth will occur in July 2020.
In addition, On Dec. 28, 2019,...
On Dec. 15, 2019, Julie’s Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest...
On Dec. 15, 2019, Julie’s Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest won’t accrue until January 2020. Julie’s Tax Prep will be displaying for the first time at a trade show in July 2020. On Dec. 16, 2019, Julie’s prepaid the $8,000 trade show booth rental expense. The payment isn’t due until May 2020, and the use of the booth will occur in July 2020. In addition, On Dec. 28,...
1. TF.07.042 Currently, a net operating loss can be carried forward only (no carryback exists). True...
1. TF.07.042 Currently, a net operating loss can be carried forward only (no carryback exists). True False 2. TF.08.006 The maximum cost recovery method for all personal property under MACRS is 150% declining balance True False 3. DRILL business and nonbusiness bad debts Tax Drill - Business and Nonbusiness Bad Debts Complete the following statements regarding business and nonbusiness bad debts. bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when...
On Dec. 15, 2018, Julie’s Tax Prep, a cash-method taxpayer, prepaid $3,000 worth of deductible interest on a business lo...
On Dec. 15, 2018, Julie’s Tax Prep, a cash-method taxpayer, prepaid $3,000 worth of deductible interest on a business loan. The interest won’t accrue until January 2019. Julie’s Tax Prep will be displaying for the first time at a trade show in July 2019. On Dec. 16, 2018, Julie’s prepaid the $6,000 trade show booth rental expense. The payment isn’t due until May 2019, and use of the booth will occur in July 2019. In addition, On Dec. 28, 2018,...
This year, Randy paid $30,250 of interest on his residence. (Randy borrowed $480,000 to buy his...
This year, Randy paid $30,250 of interest on his residence. (Randy borrowed $480,000 to buy his residence, and it is currently worth $530,000.) Randy also paid $3,250 of interest on his car loan and $5,325 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances? a)Randy received $2,800 of interest this year and no other investment income or expenses. His AGI is $75,000. His...
On Dec. 15, 2018, Julia’s Service Station, an accrual-method taxpayer, prepaid $3,000 worth of deductible interest...
On Dec. 15, 2018, Julia’s Service Station, an accrual-method taxpayer, prepaid $3,000 worth of deductible interest on a business loan. The interest won’t accrue until 2019. Julia’s Service Station will be displaying for the first time at a trade show in July 2019. On Dec. 16, 2018, Julia’s prepaid the $6,000 trade show booth rental expense. The payment isn’t due until May 2019, and use of the booth will occur in July 2019. In addition, On Dec. 28, 2018, Ed’s...
On Dec. 15, 2019, Julie's Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest...
On Dec. 15, 2019, Julie's Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest won't accrue until January 2020. Julie's Tax Prep will be displaying for the first time at a trade show in July 2020. On Dec. 16, 2019, Julie's prepaid the $8,000 trade show booth rental expense. The payment isn't due until May 2020, and use of the booth will occur in July 2020. In addition, On Dec. 28, 2019,...
On Dec. 15, 2019, Julia’s Service Station, an accrual method taxpayer, prepaid $4,000 worth of deductible...
On Dec. 15, 2019, Julia’s Service Station, an accrual method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest won’t accrue until 2020. Julia’s Service Station will be displayed for the first time at a trade show in July 2020. On Dec. 16, 2019, Julia’s prepaid the $8,000 trade show booth rental expense. The payment isn’t due until May 2020, and the use of the booth will occur in July 2020. In addition, On Dec. 28,...
On Dec. 15, 2019, Julie’s Tax Prep, a cash-method taxpayer,
prepaid $4,000 worth of deductible interest on a business loan. The
interest won’t accrue until January 2020.
Julie’s Tax Prep will be displaying for the first time at a
trade show in July 2020. On Dec. 16, 2019, Julie’s prepaid the
$8,000 trade show booth rental expense. The payment isn’t due until
May 2020, and use of the booth will occur in July 2020.
In addition, On Dec. 28, 2019,...
1. TF.07.042 Currently, a net operating loss can be carried forward only (no carryback exists). True False 2. TF.08.006 The maximum cost recovery method for all personal property under MACRS is 150% declining balance True False 3. DRILL business and nonbusiness bad debts Tax Drill - Business and Nonbusiness Bad Debts Complete the following statements regarding business and nonbusiness bad debts. bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when...
On Dec. 15, 2019, Julie's Tax Prep, a cash-method taxpayer, prepaid $4,000 worth of deductible interest on a business loan. The interest won't accrue until January 2020. Julie's Tax Prep will be displaying for the first time at a trade show in July 2020. On Dec. 16, 2019, Julie's prepaid the $8,000 trade show booth rental expense. The payment isn't due until May 2020, and use of the booth will occur in July 2020. In addition, On Dec. 28, 2019,...
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