Melba incurred the following expenses for her dependent daughter during the current year: How much may Melba deduct in computing her itemized deductions? A) $0 B) $8,800 C) $11,700 D) $18,100 E) None of the above. During 2016 , the first year of operations, Silver, Inc., pays salaries of $175,000. At the end of the year, employees have earned salaries of $20,000, which are not paid by Silver until early in 2017 . What is the amount of the deduction for salary expense? A) If Silver uses the cash method, \$175,000 in 2016 and $0 in 2017. B) If Silver uses the cash method, \$0 in 2016 and \$195,000 in 2017. C) If Silver uses the accrual method, $175,000 in 2016 and $20,000 in 2017. D) If Silver uses the accrual method, \$195,000 in 2016 and \$0 in 2017. E) None of the above is correct. Which of the following statements is TRUE? A) The Internal Revenue Code does not specifically define what constitutes a trade or business. B) Deductions are allowed unless a specific provision of the tax code provides otherwise. C) Hobby losses can be deducted in full as long as there is hobby revenue even if the hobby expenses exceed revenue. D) Depending on the nature of the expenditure, trade or business expenses may be deductible either for or from AGI. Question 76 Which of the following statements is TRUE? A) A theft loss deduction is taken in the year the theft is discovered. B) A theft loss deduction is taken in the year the theft occurs. C) If $1244 stock is sold at a loss, ALL of the loss is an ordinary loss. D) When a net operating loss is carried back to a non-loss year, the net operating loss will NOT affect the itemized deduction for medical expense