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James is in the business of debt collection. He purchased a $20,000 account receivable from Green Corporation for $15,000. During the year, James collected $17,000
- James is in the business of debt collection. He purchased a $20,000 account receivable from Green Corporation for $15,000. During the year, James collected $17,000 in final settlement of the account. How much can James take as a bad debt deduction in the current year for this transaction:
a) $ 2000 (loss) b)0 c)$5000 d)$3000
2. Which of the following credits is considered refundable?
a.) Child and dependent care credit b.) Retirement plan contribution credit
c.) Child tax credit d.) Credit for elderly
3. Tax advantages of being self-employed (rather than being an employee) include:
a.) The overall limitation (50%) on meals does not apply. b.) An office in the home deduction (for AGI) is available.
c.) Job-related expenses are deductions for AGI. d.) Both b. and c. are advantages.
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