1. Joshua, a head of household, has income and expenses from the following sources for 2019:

Net loss from his small business $ 9,500

Wages from unrelated business 6,000

Interest income 8,000

Itemized deductions 7,500

How much is Joshuas net operating loss, if any?

How is any net operating loss treated?

2. Randi incurred the following expenses in operating her personal car that was also used in her sole proprietorship. The car was driven 16,000 miles during the year 2019:

Variable expenses including fuel, maintenance, etc. $ 5,300

Fixed expenses including insurance, depreciation, etc. 2,900

Interest on loan secured by the automobile 560

Business related parking and tolls 25

Randi drove this vehicle 3,400 business miles during the year. This is the first year that the auto is used in the business. What is her deduction for the business use of this automobile?

3. Greg flew from Kansas City to Boston on Thursday to attend business on Friday. He could have flown home Friday evening with no additional airfare. He stayed over Saturday through Monday to attend a sporting event and visit the historic sights. Greg paid airfare of $300, meals of $26 per day (after reduction to 50 percent) and lodging of $59 per day. Greg may deduct how much?

4. Maryam is a very successful self-employed hairstylist who incurred the following expenses in her trade or business:

Meals with clients where business was discussed $ 2,000

Meals with clients where business was not discussed 750

Meals served at employee meetings 400

Employee meals while away from home overnight

(reimbursement given to employees) 500

Maryams meals while away from home overnight 500

Tickets to dramatic performance with clients associated with business 300

How much of the above may Maryam deduct?

5. Mesab owned a special purpose boat for use in a fishing business. The boat originally cost $4,000 and had a basis of $-0-. The boat that was worth $3,200 at the time was totally destroyed when it was blown by strong winds into large rocks. How much can Mesab deduct related to this casualty? Is this a deduction for AGI or from AGI?

6. Duy frequently makes loans to suppliers that are suffering financial problems. At the beginning of the year, Duy had outstanding loans of $8,000, $2,200 of which he believed were uncollectable. At the end of the year, Duy had outstanding loans of $6,000, $1,200 of which he believed were uncollectable. During the year, Duy determined that $1,800 of specific loans were worthless. How much is Duys bad debt deduction?

How would your answer differ if the debts were not business debts?

If there are questions that you cannot answer based on Chapter 9, look in other chapters or use an internet browser.