Income and Expenses

Question $9$ of $45.$

Thomas opened a new retail shop in $2022$ that sells luxury pens, ink, and other writing essentials. He organized the business as a single$-$member LLC$.$ His organizational costs, which included state filing fees and legal fees for the articles of incorporation, totaled $$6,500.$ What is the maximum amount that can be deducted as an immediate $($non$-$amortized$)$ expense for these organizational costs on his $2022$ Schedule C$?$

$$0$

$$1,500$

$$5,000$

$$6,500$

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Question $10$ of $45.$

In $2022,$ Irene opened a new retail shop specializing in handcrafted, artisanal gifts. Her startup costs, which included the business plan development, promotional events, and wages for employees who needed to be trained prior to the business opening, totaled $$52,000.$ What is the maximum amount that can be deducted as an immediate $($non$-$amortized$)$ expense on her $2022$ Schedule C$?$

$$52,000.($The entire amount of her start$-$up costs.$)$

$$5,000.($The maximum amount for an immediate deduction; the remaining $$47,000$ must be amortized over $15$ years.$)$

$$3,000.($The maximum amount for an immediate deduction is limited due to her total expenses exceeding $$50,000$; the remaining $$49,000$ must be amortized over $15$ years.$)$

$$0.($No immediate deduction is allowed; the entire $$52,000$ must be amortized over $15$ years.$)$

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Question $11$ of $45.$

Javier is self$-$employed. In $2022,$ he earned income of $$5,500$ from one firm, reported to him on a Form $1099-$NEC, and income of $$4,000$ from another firm, also reported to him on a Form $1099-$NEC. In addition, he had $$20,000$ in credit card transactions reported on Form $1099-$K$.$ All of the income was related to his self$-$employment activity. What is the amount of gross receipts or sales that should be reported in Part I of the Schedule C for this activity?

$($NOTE: The amount reported as the gross amount for credit card transactions did not include any sales taxes that Javier collected and paid over to state and local governments.$)$

$$9,500$

$$20,000$

$$25,500$

$$29,500$

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Question $12$ of $45.$

Alison is a self$-$employed contractor. She uses a calendar$-$year, cash$-$basis accounting system. Which of the following should be included in calculating the amount of gross receipts and sales reported on her $2022$ Schedule C$?$

A $$900$ check received on January $13,2022,$ for a project she completed on December $28,2021.$

$$1,000$ in prize money that she won in June $2022$ for Regional Contractor of the Year.

$$1,850$ check from a customer for merchandise they purchased on December $22,2022.$ Alison did not get around to cashing the check until January $6,2023.$

$$2,100$ in credit card processing fees for $2022,$ related to her received Form $1099-$K$.$

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Question $13$ of $45.$

Kelvin, a cash$-$basis taxpayer, operates a small bookstore. His records show the following income items for $2022$:

Sales $$ Paid, $$55,000.$

Sales $$ Unpaid, $$2,500.$

Sale of cardboard packaging to recycling company $$ Paid, $$3,175.$

Sales bonus from publisher $$ Paid, $$1,000.$

What is the amount of gross receipts and sales that should be reported in Part $1$ of Kelvin's Schedule C$?$

$$56,000$

$$59,175$

$$60,675$

$$61,675$