Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,920 for gasolineon these trips. His depreciation on the car if he was using it fully for business purposes would be $3,900. During the year,he drove his car a total of 16,400 miles (a combination of business and personal travel).Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.b. Ryan estimates that he drove approximately 1,740 miles on business trips, but he can only provide written documentation of thebusiness purpose for trips totaling 1,300 miles. What business expense amount can Ryan deduct (if any) for these trips?Maximum deductible amount

Costs incurred in the regular course of business are referred to as business expenditures. Tax…

Answered: Ryan is self-employed. This year Ryan…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On 1 June 2018, Toby purchased a new truck to use in his business for $650,000. The Commissioner's effective life for the truck was 3 years. Toby decided to upgrade to a new Tesla-battery powered truck and sold his old truck to a 2nd hand truck dealer for 325,000 on 31 August 2019. Toby estimates he used his truck for business purposes for about 90% of the time. Advise Toby on the income tax consequences arising for him as a result of the disposal of the truck under BOTH: (a) the Prime Cost Method; and (b) the Diminishing Value Method. Assume Toby is not a small business entity.
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. Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn't want to take bonus depreciation for 2021 or 2022) in the following alternative scenarios (assuming half-year convention for all ): a) The vehicle cost $35,000, and business use is 100 percent (ignore §179 expense). b) The vehicle cost $80,000, and business use is 100 percent. c) The vehicle cost $80,000, and she used it 80 percent for business. d) The vehicle cost $80,000, and she used it 80 percent for business. She sold it on March 1 of year 2. e) The vehicle cost $80,000, and she used it 20 percent for business. f) The vehicle cost $80,000 and is an SUV that weighs 6, 500 pounds. Business use was 100 percent.
An employee is required to use her own automobile for employment duties. She acquired a new car at the beginning of the year for $40000 (including GST and HST of 8 %) and during the year she incurred the following expenses. Gasoline $2200, repairs and maintenance $400, insurance and registration $800, meals while away from the office $420 ($200 relates to out of town travel), parking during employment duties $ 300 and interest on loan to acquire car $3900. During the year, the employee drove 26000 km of which 14000 were for employment duties and the remaining were personal. Compute the personal and employment expenses.
Jimmy took a business trip from Dallas to Brazll. He was there for a total of seven days, of which two were weekend days. Over the weekend, he spent his time sightseeing and relaxing. His expenses were as follows: Airfare Lodging (7 days x $300) Meals (7 days) Taxi fares ($600 to and from business meetings) How much is Jimmy allowed to deduct? Multiple Choice O O $3,404 $3,496 $4,598 $4,895 $1,400 2,100 595 800
After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $312,000. Ingrid allocated $52,000 of the purchase price to goodwill. Ingrid’s business reports its taxable income on a calendar-year basis. a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3?
Shellie purchased a passenger automobile on March 2, 2018. She paid $65,000 for the automobile and can support business use of 85 percent. Calculate the amount of depreciation on the automobile for 2018 using the accelerated MACRS method (if available), assuming Shellie does not make the election to expense or claim bonus depreciation
.
Sid Slaw purchased a car three years ago that he used for both private and business purposes (he is a freelance journalist). Sid bought the vehicle for $40,000 and made an initial input tax claim of $4,173.91 out of the $5,218 GST paid. After a year, Sid realised he had overestimated his business use proportion and made an output tax adjustment of $2,086.95. Sid has just sold the car for $12,000. Calculate the net amount of GST Sid should return to the IRD upon sale of the car?
Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 1,088 miles on the four-wheeler that he bought on January 15 for $11,900. Of the miles driven, only 243 miles were for personal use. Assume four-wheelers qualify to be depreciated according to the five-year MACRS schedule and the four-wheeler was the only asset Phil purchased this year. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) a. Calculate the allowable depreciation for year 1 (ignore the §179 expense and bonus depreciation).
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Dana forms a small manufacturing company. Her company places the following ng properties into service during the year, on the dates indicated: Type of property Date placed in service Cost_____ Business building April 6 $275,000 Furniture June 5 $57,000 Machinery September 2 $65,000 Computer December 27 $25,000 She chooses not to do any Section 179 expense, and also elects not to take bonus depreciation. She uses MACRS depreciation. Calculate the first year depreciation on the building, and also on the machinery:

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