Taxpayer operates a business as a sole proprietor During the year, Taxpayer incurred the following expense in operating that business Determine the total business expense deduction to which Taxpayer is entitled after all applicable limitations Employee salary $15,000 Payroll taxes $1,500 Lunch with a client $250 Ticket to Superbowl with best client $3,500 Contribution to the mayor's re election campaign $500 Cell phone bill of Taxpayer's son, who does not work at business $750 On 15 August 2019, ABC LLC sold furniture (seven year property) it had placed in service on 1 November 2017 The furniture was the only asset placed in service during 2017 and had an initial basis of $7,000 Further, ABC did not elect 179 expensing and elected out of bonus depreciation (no 179 or bonus) Determine the depreciation deduction for 2019, the year of sale In 2019, its first year in business, ABC LLC incurred $52,750 in start up costs If ABC LLC began business on 15 August 2019, determine the total cost recovery ABC LLC may deduct with respect to the start up costs (including any immediate deduction and amortization)

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Posted on Aug 31, 2024

Taxpayer operates a business as a sole proprietor. During the year, Taxpayer incurred the following expense in operating that business. Determine the total business expense deduction to which Taxpayer is entitled after all applicable limitations.
- Employee salary - $15,000
- Payroll taxes - $1,500
- Lunch with a client - $250
- Ticket to Superbowl with best client - $3,500
- Contribution to the mayor's re-election campaign - $500
- Cell phone bill of Taxpayer's son, who does not work at business - $750
On 15 August 2019, ABC LLC sold furniture (seven-year property) it had placed in service on 1 November 2017. The furniture was the only asset placed in service during 2017 and had an initial basis of $7,000. Further, ABC did not elect 179 expensing and elected out of bonus depreciation (no 179 or bonus). Determine the depreciation deduction for 2019, the year of sale.
In 2019, its first year in business, ABC LLC incurred $52,750 in start-up costs. If ABC LLC began business on 15 August 2019, determine the total cost recovery ABC LLC may deduct with respect to the start-up costs (including any immediate deduction and amortization).