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

Net loss from his small business$21,500

Wages from unrelated business14,000

Interest income8,000

Itemized deductions7,500

How much is Joshua's 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 17,750 miles during the year 2019:

Variable expenses including fuel, maintenance, etc.$ 5,900

Fixed expenses including insurance, depreciation, etc.3,900

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 the maximum deduction for the business use of this automobile?

What restrictions will Randi face in future years related to this auto if Randi elects to use the actual costs?

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.Shaoq is a very successful self-employed hair stylist who incurred the following expenses in a 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

Shaoq's meals while away from home overnight 500

Tickets to dramatic performance with clients associated with business 300

How much of the above may Shaoq deduct?

5. Nabeel owned a special purpose boat for use in a fishing business.The boat originally cost $9,000 and had a basis of $-0-.The boat that was worth $5,200 at the time was totally destroyed when it was blown by strong winds into large rocks.

How much can Nabeel deduct related to this casualty?Is this a deduction for AGI or from AGI?

6. Yeji frequently makes loans to suppliers that are suffering financial problems.At the beginning of the year, Yeji had outstanding loans of $8,000, $2,200 of which Yeji believed were uncollectable. At the end of the year, Yeji had outstanding loans of $6,000, $1,200 of which Yeji believed were uncollectable.During the year, Yeji determined that $1,800 of specific loans were worthless.

How much is Yeji's bad debt deduction?

How would your answer differ if the debts were non-business debts?