LO 7.6 22. You have a problem and need a full-text copy of the Related Party Code Section 267.

Go to the U.S. House of Representatives’ Web site (www.house.gov) and click on the U.S. Code Search page. The Internal Revenue Code is Title 26. Use the search page to find Section 267 and print out a copy of Section 267(a).

1. Sherry Hopson owns a retail family clothing store. Her store is located at 4321 Circle Drive, Houston, TX 77001. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. The income and expenses for the year are:

The truck is not considered a passenger automobile for purposes of the luxury automobile limitations.
Required: Assuming that all other assets are fully depreciated and Sherry does not make the election to expense or take bonus depreciation, complete her 2010 Schedule C and Form 4562 on pages 7-39 to 7-42. Make up any additional information you need to complete the schedule.

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Gross sales Returns and allowances Net sales Expenses: Beginning inventory (at cost) Add: purchases Cost of goods available for sale. Less: ending inventory (at cost) Cost of goods sold Rent Insurance Legal and accounting fees Payroll $350,000 (4,500) $345,500 $ 82,500 Payroll taxes Utilities Office supplies Advertising 210,000 292,500 (71,000) $221,500 9,000 1,500 900 38,000 2,600 1,850 750 2,100 On June 1 of this year, Sherry purchased the following new assets for the store: Heavy duty truck Desk and file cabinets Computer Depreciable Basis Recovery Period $31,000 2,000 5 years 7 years 6,000 5 years