Question

Julia is single. Julia operates a small business selling baseball cards and memorabilia. As part of that business, Julia frequently sells signed baseballs. In order to get a signature from Mike Trout (a famous baseball player), Julia attends a game in her hometown. Prior to the game, Julia gets Mr. Trout’s autograph and then stays to watch the game. It cost Julia $100 to attend the game. For the year, Julia has the following additional items of income and expenses:

$85,000 gross income from sales of memorabilia

$20,000 of operating expenses and COGS (not including the $100 discussed above)

$6,000 of medical expenses

$12,000 of state and local sales and property taxes

$3,500 of mortgage interest on her residence

Can Julia deduct the $100 cost of attending the baseball game? Why or why not? Please calculate (showing your work) Julia’s adjusted gross income and her taxable income for the year.

Answer 1

Answer:

Yes, Julica can deduct $100 cost which id spend for attending the baseball game becasuse the business of julie is related to that and also Julie is selling signed baseball and for that she need a sign of famous baseball player hence the expense are related to business and allowed to be deducted

Gross total income of Julica

Particulars		Income
Gross business income		85,000
Less: Operating expenses	20,000
Less:Business promotion expenses	100	20,100
Taxable income		64,900