Homework Answers
1) Answer is False.
Deductions are a matter of legislative grace. The only deductions allowed are those specifically provided by the statute.
2) Answer is true.
As the taxpayer is operating an illegal business he is not eligible to claim any deductions.
3) Answer is false.
Maximum cost recovery method for personal property under macrs is not 150% declining balance.
4) Answer is true.
Purpose of excess business rule is to limit and remove non business income.
5) Answer is true.
The basis of cost recovery property must be reduced by atleast the cost recovery allowable.
Thank you.
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