Question
Please help! I can't get full points and seems like am selecting incorrect answers. 1) Harrison operates a retail sports memorabilia shop as a sole-proprietor.
Please help! I can't get full points and seems like am selecting incorrect answers.
1) Harrison operates a retail sports memorabilia shop as a sole-proprietor. For the current year he had sales revenue of $50,000. He had the following expenses
Cost of Goods Sold | $20,000 |
Mortgage Interest Expense on personal residence | $8,000 |
Property Taxes on personal residence | $11,000 |
California State Income Tax Paid | $5,000 |
Wages | $5,000 |
FICA taxes paid on wages | $382 |
Self-employed health insurance | $3,000 |
Self-employment tax | $565 |
Select one or more:
a. Part of the California State Income Tax is deducted on Schedule C based on the percentage of income Harrison earned from his business relative to his total income.
b. The $382 FICA taxes are not deductible
c. Half-of the self- employment tax is deducted on Schedule C
d. Harrison can claim the QBI deduction for the business.
e. The FICA taxes paid on the wages are deducted on Schedule C,
f. The self-employed health insurance is not deducted on Schedule C.
g. Mortgage Interest and Property Taxes are deducted on Schedule A.
h. The property taxes and state income taxes are limited to $10,000
Russell had two investments: a coin collection and land. He rented the land to a tenant who paid him $10,000 rent. He also had net investment income of $500. The rental of the land is not considered a business. Assume he itemizes his deductions. He had the following expenses.
Which of the following is/are true?
I answered A,D,E,F but got .88 points. Did I miss any answers or selected one incorrect answer?
Property taxes on land | $13,000 |
Mortgage Interest expense on land | $3,000 |
Safe deposit rental to store coins safely | $500 |
Insurance on coins | $300 |
Interest expense paid on loan to purchase coins | $700 |
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Select one or more:
a. . Deduction of the property taxes is limited to $10,000
b. Russell can deduct the safe deposit rental, insurance and interest expense as investment expenses.
c. Russell has a passive activity loss of $6000 and the deduction is limited based on his AGI
d. Russell has a net loss on Schedule E of $6,000.
e. The property taxes and mortgage interest expense are deductible FOR AGI
f. The safe deposit rental and insurance on the coins are not deductible on the Federal Tax Return but are deductible on the California Tax Return
g. The property taxes and mortgage interest expense are investment expenses which are no longer deductible on Form 1040.
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