Henrietta, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $25,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $50,600. She proceeds with opening the restaurant, and it begins operations on May 1. Determine the amount that Henrietta can deduct in the current year for investigating these two businesses. In your computations, round the per-month amount to the nearest dollar and use rounded amount in subsequent computations. a. The deductible amount of investigation expenses related to expansion of her hotel chain into another city: $ 25,000 b. The deductible amount of investigation expenses related to opening a restaurant: Daniel, age 38, is single and has the following income and expenses in 2021: Salary income $105,000 Net rent income 9,500 Dividend income 700 30,000 Payment of alimony (divorce finalized in March 2019) Mortgage interest on residence 8,300 Property tax on residence 2,600 Contribution to traditional IRA (assume the amount is fully deductible) 2,400 Contribution to United Church 2,100 Loss on the sale of real estate (held for investment) 2,700 Medical expenses 4,950 State income tax 1,800 Federal income tax 3,800 Daniel's standard deduction for 2021 is $12,550. a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible". Not deductible Payment of alimony (divorce finalized in March 2019) Mortgage interest on residence Deductible from AGI Property tax on residence Deductible from AGI Deductible for AGI Contribution to traditional IRA (assume the amount is fully deductible) Contribution to United Church Deductible from AGI Deductible for AGI Loss on the sale of real estate (held for investment) Medical expenses Deductible from AGI State income tax Deductible from AGI Federal income tax Not deductible What is Daniel's gross income and his AGI? Gross income: $ 115,200 AGI: $ 110,100 Feedback Check My Work To understand how deductions of individual taxpayers are classified, it is necessary to examine the role of $ 62. The purpose of $ 62 is to classify various deductions as deductions for AGI. It does not provide the statutory authority for taking the deduction. b. Should Daniel itemize his deductions from AGI or take the standard deduction? Because Daniel's total itemized deductions (after any limitations) are $ 7,700 x , he would benefit from itemizing his deductions