During 2016, John was the chief executive officer and a shareholder of Maze, Inc. He owned 60% of the outstanding stock of Maze. In 2013, John and Maze, as co borrowers, obtained a $100,000 loan from United National Bank. This loan was secured by John's personal residence. Although Maze was listed as a co-borrower, John repaid the loan in full in 2016. On Maze's form 1120 tax returns, no loans from shareholders were reported. Discuss whether John is entitled to a bad debt deduction for the amount of the payment on the loan.

In 2013 due to some unknown reasons, he demolished the house and constructed house on the same lot. The house was completed in 2014 and decided not to stay in the same house. He sold the house in 2014 at gain of $547,000. He excluded gain of $500, 000 (exclusion allowed for MFJ) and paid capital gain on $47,000. He was audited for 2014 and IRS had a different idea. why?

This year, Major Healy paid $35,750 of interest on a mortgage on his home (he borrowed $715,000 to buy the residence in 2015; $815,000 original purchase price and value at purchase), $5,500 of interest on a $110,000 home equity loan on his home (loan proceeds were used to buy antique cars), and $8,250 of interest on a mortgage on his vacation home (borrowed $165,000 to purchase the home in 2010; home purchased for $412,500). Major Healy's AGI is $220,000. How much interest expense can Major Healy deduct as an itemized deduction? Interest Deductible

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.   Hugh and Jacobs began the partnership by contributing $90,000 and $40,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $7,000 was to go to Hugh with a $17,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.    In 2017, revenues totaled $115,000, and expenses were $87,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $7,500 for repairs made…