US Taxation

(II) For the following. indicate if the expenses are fully deductible, partially deductible, or nondeductible for regular tax purposes on federal income tax return. Sriections F. Fully deductible for regular tax purposes. P. Partially deductible for regular tax purposes: N Nondeductble for regular tax purposes. (F) (P) (N) Conp's purctiased theater tickets for its out of town clients. The performances took place after Corp's substantial and bona fide business negotiations with its clients: 13 Corp's accrued advertising expenses to promote a new product line. The percent of the new product line remained in ending inventory. Corp's incurred interest expense on a loan to purchase municipal bonds. 15 Corp's paid a penalty for the underpayment of prior year estimated federal income taxes 16 Comp's board of directors voted to pay a $500 bonus to each nonstockholder employee for current year. The bonuses were paid on February 3, next year. 14 17 (Iii) For the following, indicate if the items are fully taxable, partially taxable, or nontaxable for regular tax purposes. Selections F fully taxable for regular tax purposes; P. Partially taxable for regular tax purposes. N. Nontaxable for regular tax purposes. The portion of Corp's refund that represerited the overpayment of prior year federal income taxes. (F) (P) (N) The portion of Corp's refund that is ottributable to the interest on the overpayment of federal income taxes. 18 Corp's received dividend income from a mutual fund that solely invests in municipal bonds. 19 Corp's the lessor benefited from the capital improvements made to its property by the lessee. The lease agreement provides: for a reduction in rental payments by the lessee in exchange 21 for the improvements