3. Iris, a calendar year cash basis taxpayer, owns and operates several TV rental outlets in Florida and wants to expand to other states. During the current year, she spends $14,000 to investigate TV rental stores in South Carolina and $9,000 to investigate TV rental stores in Georgia. She acquires the South Carolina operations but not the outlets in Georgia. As for these expenses, Iris should: a. Capitalize $14,000 and not deduct $9,000. b. Expense $23,000 in the current year. c. Expense $9,000 in the current year and capitalize $14,000. d. Capitalize $23,000. 24. Which of the following, if any, correctly describes the camed income credit? a. Would be available regardless of the amount of the taxpayer's adjusted gross income. b. Is not available to a surviving spouse. c. Requires a taxpayer to have a qualifying child to take advantage of the eredit. d. Is a refundable credit. 25. X, is an accrual method, calendar year, taxpayer in the business of sponsoring classical music concerts. X sponsored a concert performed on December 23, 2003. X generated $120,000 of revenue from this concert. In connection with this concert X had the following expenses: (i) X rented a concert venue for one night (the night of the 23 rd) at Lincoln center for $30,000, which X paid on December 21,2023 , (ii) X hired performers (for the one night performance on Dec. 23) whom X paid $25,000 on January 4,2024 , and (iii) X hired a clean-up agency to restore the concert hall to its original condition. X hired and paid the clean-up agency $17,000 on December 29,2023 , and the agency actually cleaned up the concert hall on January 5,2024 . What is X net income from THIS concert for 2023 ? a. $90,000 b. $73,000 c. $65,000 d. $48,000 e. None of a-d is correct Objective Short Answer 26. A and B, two individuals, purchased a house " H" as joint (50% ) owners, for $500,000. A and B agreed they would rent the house and share income and losses 50/50. In 2022, they rented the house for 100 days and received rents of $20,000. In addition, in 2022, B used the house for personal use for 20 days. A did not use the house in 2022. In 2022: (i) the real estate taxes on H were $6,000, the mortgage interest paid on H was $12,000, and (iii) maintenance costs were $9,000. Assuming A is a single 35 year old, who earns a $110,000 salary, and had no other transactions. a. What is A 's adjusted gross income ("AGI") in 2022 ? b. What is A's taxable income in 2022 ? 3. Iris, a calendar year cash basis taxpayer, owns and operates several TV rental outlets in Florida and wants to expand to other states. During the current year, she spends $14,000 to investigate TV rental stores in South Carolina and $9,000 to investigate TV rental stores in Georgia. She acquires the South Carolina operations but not the outlets in Georgia. As for these expenses, Iris should: a. Capitalize $14,000 and not deduct $9,000. b. Expense $23,000 in the current year. c. Expense $9,000 in the current year and capitalize $14,000. d. Capitalize $23,000. 24. Which of the following, if any, correctly describes the camed income credit? a. Would be available regardless of the amount of the taxpayer's adjusted gross income. b. Is not available to a surviving spouse. c. Requires a taxpayer to have a qualifying child to take advantage of the eredit. d. Is a refundable credit. 25. X, is an accrual method, calendar year, taxpayer in the business of sponsoring classical music concerts. X sponsored a concert performed on December 23, 2003. X generated $120,000 of revenue from this concert. In connection with this concert X had the following expenses: (i) X rented a concert venue for one night (the night of the 23 rd) at Lincoln center for $30,000, which X paid on December 21,2023 , (ii) X hired performers (for the one night performance on Dec. 23) whom X paid $25,000 on January 4,2024 , and (iii) X hired a clean-up agency to restore the concert hall to its original condition. X hired and paid the clean-up agency $17,000 on December 29,2023 , and the agency actually cleaned up the concert hall on January 5,2024 . What is X net income from THIS concert for 2023 ? a. $90,000 b. $73,000 c. $65,000 d. $48,000 e. None of a-d is correct Objective Short Answer 26. A and B, two individuals, purchased a house " H" as joint (50% ) owners, for $500,000. A and B agreed they would rent the house and share income and losses 50/50. In 2022, they rented the house for 100 days and received rents of $20,000. In addition, in 2022, B used the house for personal use for 20 days. A did not use the house in 2022. In 2022: (i) the real estate taxes on H were $6,000, the mortgage interest paid on H was $12,000, and (iii) maintenance costs were $9,000. Assuming A is a single 35 year old, who earns a $110,000 salary, and had no other transactions. a. What is A 's adjusted gross income ("AGI") in 2022 ? b. What is A's taxable income in 2022
