Illegal Payments. Indicate whether Glenda can deduct the $5,000 payment in each of the following independent situations. a. Glenda is a supplier of medical supplies. In order to secure a large sales contract to the regional Veterans Affairs Hospital, Glenda makes a gift of $5,000 to the hospital's purchasing agent. The payment is illegal under state law. b. Assume the same facts as in Part a, except that the payment is made to the purchasing agent of a government-owned hospital in Brazil. c. Assume the same facts in Part a, except that the payment is made to the purchasing agent of a privately owned hospital in Idaho. Capitalization vs. Expense. Sam owns a small apartment building (this is the only rental building Sam owns). During the year Sam incurs the following expenditures: Item Amount Replace roof and roof underlying structure because of building $30,000 code requirements Repaint the interior 3,000 Repair door handles and door locks 1,000 Replace broken windows 1,500 Replace crumbling sidewalks and stairs because of building code requirements 25,000 Discuss the proper tax treatment for these expenditures. Identify which of these expenses are deductible and the amount that is deductible by Roberta. Indicate whether they are deductible for or from AGI. For vs. From AGI. During 2020, Kent, a 40-year-old single taxpayer, reports the follow- ing items of income and expense: Income: Salary $150,000 Dividends from Alta Corporation 800 Interest income from a savings account 1,500 Rental income from a small apartment he owns 8,000 Expenses: Medical 6,000 Interest on a principal residence 7,000 Real property taxes on the principal residence 4,300 Charitable contributions 4,000 Loss from the sale of Delta Corporation stock 2,000 (held for two years) Expenses incurred on the rental apartment: Maintenance 500 Property taxes 1,000 Utilities 2,400 Depreciation 1,700 Insurance 800 Alimony payments to former wife (divorced July 21, 2018) 10,000 The amounts above are before any limitations. What is Kent's taxable income for the year? Legal and Accounting Expenses. Sam is a sole proprietor who owns, leases, and manages several apartment complexes and office buildings. During the current year, Sam incurs the following expenses. Which of these expenditures are deductible? Are they for or from AGI deductions a. $200 in attorney's fees for title searches on a new property Sam has acquired. b. $450 in legal fees in an action brought to collect back rents. c. $500 to his CPA for the preparation of his federal income tax return. $400 is for the preparation of Schedule C (Profit or Loss from Business). d. $300 in attorney's fees for drafting a will. e. $250 in attorney's fees in an unsuccessful attempt to prevent the city from rezoning the area of the city where several of his office buildings are located. PROBLEMS For or From AGI Deductions. Roberta is a self-employed accountant. During the year, Roberta incurs the following unreimbursed expenses: Item Amount Travel to client locations $750 Subscriptions to professional journals 215 Taking potential clients to lunch 400 Photocopying 60 $1,425 Identify which of these expenses are deductible and the amount that is deductible by Roberta. Indicate whether they are deductible for or from AGI