+
Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
|
Limitations on business deductions- expenses against public policy, no deduction for the following:
|
-fines, penalties, illegal bribes, illegal kickbacks, any payment for illegal services or goods
|
|
Political contributions and most lobbying costs (are, are not) deductible
|
Are not
|
|
Expenses relating to tax-exempt income:Interest expenses on loan where proceeds invested in municipal bonds (are, are not) deductible.Life Ins. premiums paid for officers or other key employees that compensate business due to a key employee's death (are, are not) deductible.
|
Are notare not
|
|
Use the ____ rule for capital expenditures.
|
12 month rule- deduct if benefit less or equal to 12 months and benefits do not extend beyond end of next tax year
|
|
12 month rule for prepaid capital expenditures does not apply to
|
Rent or interest.
|
|
Ben makes following payments on June 30 of this year:-pays $10,000 for next 10 months of utilities-pays $12,000 for insurance over next 24 months-pays $9,600 for next 8 months of rent
|
-deduct all $10,000 because benefit less than 12 months and ends prior to end of next year-deduct $3000($500/mo X 6 months)-Deduct $7,200($1,200/mo X 6 months)-12 month rule does not apply to rent or interest
|
|
___% of meals and entertainment from business interaction is deductible as long as 1) 2) 3) .
|
50%1-amt is reasonable2-taxpayer or employee must be present for meal3-meal must be associated with conduction of business
|
|
Travel and transport deduction:Deduct cost of travel and transportation for business purposes. If travel is business and personal, only business days are deductible. If > 50% trip is business then___% of all transportation is deductible. If less than 50% ___% is deductible.SMR:Jan 1.-June 30- $0.51/mileJuly 1-Dec. 31- $0.555/mile
|
100%, 0%
|
|
Ben paid following to attend business meeting in Chicago: Airfare- $1,200 Hotel(3 nights)- $750, Meals(3 days)-$2701) What amounts are deductible if Ben spent two days in meetings?2)What amounts are deductible if Ben spent one day in a meeting?
|
1) $1200+$500+$90=$1790 (all or none, 250/day, 90/day X 50%)2) $0+$250+$45=$295 (all or none, 250/day, 90/day X 50%)
|
|
Property Use- some assets may be used for both business and personal purposes(car, phone, computer). Expenses are allocated based on
|
...business use %.
|
|
Start-Up expenditures are...
|
Capitalized and immediately expensed
|
|
Businesses are allowed to deduct bad debt expense when..It is only deductible for __ method taxpayers
|
..the debt becomes worthless or uncollectible.-accrual
|
