SWFT Comprehensive Vol 2020
43rd Edition
ISBN: 9780357391723
Author: Maloney
Publisher: Cengage
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Linda and her sister Hannah own a bed and
breakfast hotel in Maine in which they provide
maid services and breakfast to their tenants.
Which of the following is true regarding the tax
return that Linda must file.
Select one:
a.
She must file Schedule C
b.
She must file Schedule E
C.
She must file Schedule C and E
d.
None of the above
What is the qualified business income deduction for the following problem:
Note: This problem is for the 2018 tax year.
Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6789. Janice's parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund.
During 2018, Janice reported the following income and expense items connected with her business.
Income from sale of articles
$85,000
Rent
16,500
Utilities
7,900
Supplies
1,800
Insurance
5,000
Travel (including meals of $1,200)
3,500
Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate…
A paid tax preparer must demonstrate due diligence. Review the following scenario, and then choose the appropriate response. Cherylynn Johnson (58) comes in to your office to have her tax return prepared. She states that she wants to use the head of household filing status and claim the Earned Income Tax Credit (EITC). She also tells you that her dependent child is her granddaughter, Alana (12), who currently lives with her. All of the following are appropriate questions to ask or actions to take EXCEPT:
Ask Cherylynn how long Alana has lived with her and inquire into the whereabouts of Alana's parents.
Ask Cherylynn who paid most of the expenses of maintaining her home.
Inform Cherylynn that she must provide you with documentation proving Alana lived with her before you can prepare the return.
Inquire whether the IRS has ever denied or reduced Cherylynn's EITC in a prior year.
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Monica, a self-employed taxpayer, travels from her office in Boston to Lisbon, Portugal, on business. Her absence of 13 days was spent as follows: a. For tax purposes, how many days has Monica spent on business? b. What difference does it make? c. Could Monica have spent more time than she did vacationing on the trip without loss of existing tax benefits? Explain.arrow_forwardWhich of the following would constitute tax evasion? a. Henry salary sacrifices future income for which services have not already been provided into superannuation. b. Emily defers prepayments of income to a later income year. c. Jane does not include $50 of interest from her bank account on her tax return. d. Jia establishes a family trust and distributes income between family members equally.arrow_forward
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