Fed Tax

ye operates a fitness center. In November 2018, Raye's hires her brother, Patrik to provide $4,000 in financial consulting services to her business. Patrick, a cash method taxpayer, completes his consulting work in December of 2018 and send an invoice to Ray that same month. Raye pays the invoice in January 2019. Select the most accurate statement. a. Under the all events test for accrual basis deductions, Raye may deduct the entire $4,000 in 2018 even though she has not paid the invoice by year-end b. Under the accrual method of accounting, Raye may not deduct the $4,000 in 2018 because she has not paid the bill by year end c. Because Raye and Max are related parties, Raye may not take the deduction until Max recognizes the income d. Raye may choose whether she wishes to deduct the $4,000 in 2018 or 2019 16. AAA Best Plumbing placed the following assets into service in 2018. Determine the amount of depreciation AAA is entitled to deduction in 2018. Ignore section 179 and bonus depreciation for this problem. IN SERVICE COST LIFE ASSET 7,500 3,000 8,000 2/1/2018 6/15/2018 11/30/2018 MACHINERY COMPUTER FURNITURE 18,500 C. $3,061 d. $4,925 a. $1,958 b. $2,815 17. On 29 Apri 2018, BelVita LLC placed in service machinery and equipment (7-year property) with a basis of $1,600,000. Assume that BelVita has sufficient income to avoid any limitati (but ignoring bonus depreciation). a. $1.228,640 b $1,085,740 c. $228,640 ons. Calculate the maximum depreciation expense including $179 expensing d. $85,740 e. $0