Question
How much of these payments qualify as tax deductible expenses for Gonsalo during 2019? Gonsalo runs a business doing car repairs, writes up his taxes
How much of these payments qualify as tax deductible expenses for Gonsalo during 2019?
Gonsalo runs a business doing car repairs, writes up his taxes on the cash basis, and on the calendar year.
Gonsalo paid $ 27,000 to his landlord on 12-1-2018 for a required advance rent payment on an 18 month lease covering the months 12-1-2018 through 5-31-2020.
Gonsalo paid $ 12,000 on 7-1-2018 for a one year insurance policy covering the months of 7-1-2018 through 6-30-2019. A payment of $ 16,000 was made on 7-1-2019 for a one year policy covering the period of 7-1-2019 to 6-30-2020.
Gonsalo has a business use only credit card, used to purchase supplies. A purchase was charged on 12-30-2018 for supplies of $ 4,000, buying in bulk to receive a quantity discount, and another $6,000 purchase of supplies was charged on 8-1-2019 to fill up the stocks for 2019, and for the early months of 2020. Gonsalo paid the interest on the credit card in the amount of $ 2,500 during 2019 and has paid the principal balance on the credit card down by $ 8,000 so far by the end of 2019.
Finally, on 11-30-2018, Gonsalo signed and gave a note payable to a supplier for $3,000, due to be paid with accrued interest on May 30, 2019 with 6% annual interest. The note has a below market interest rate, and is worth $ 2,950. Gonsalo made the required payment when due. All of the purchased supplies had been used by May 2019.
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answers The Rent Paid is not applicable for tax deductions since the same is not a rent for business ...Get Instant Access to Expert-Tailored Solutions
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