Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 3, Problem 23MCQ
To determine
Concept Introduction:
The hobby loss rules can be avoided by an individual taxpayer if the taxpayer can prove that the activity was conducted with the intent to earn a profit. The IRS applies conditions to determine whether an activity is a hobby or not.
To choose:The factor not considered by IRS for defining an activity as hobby or not.
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Students have asked these similar questions
-Which of the following should not be claimed as deductions from gross income? *
interest payment on loans for the purchase of machinery and equipment used inbusiness.
salaries and bonuses paid to employees.
discounts given to senior citizens on certain goods and services.
advertising expense to maintain some form of goodwill for the taxpayer’s business.
1. According to the article by Tony Dimitriadis (see Supplementary Study Materials Folder), whether an amount received by a taxpayer following the sale of a capital asset (e.g. real estate) will be treated as capital or income depends largely on:
Select one:
The intention of the taxpayer when the property was first acquired
The degree of renovation and development carried out on the property
Whether the taxpayer held on to the property, rather than making a short term profit
Whether the taxpayer is an individual or a business taxpayer
All of the above are important considerations
2. Select the INCORRECT statement from the following options:
Select one:
The Cost Base of Personal Use Assets excludes Element 3 expenses (Ownership Costs)
An antique vase bought at a garage sale for $200 and sold for $20,000 is exempt from CGT
The indexation rate for assets acquired on 2 February 1986 was 41.4
All costs incurred under Element 3 (Ownership Costs) should be included in the indexation…
Ac.
Which of the following statements regarding the home office deduction is true? In order to qualify for the deduction, a portion of the taxpayer's home must be used regularly and exclusively to meet with clients or customers. A home office deduction is not allowed for using the home office for administrative or management activities only. The home office deduction is limited to the taxable income of the business before the deduction. A depreciation deduction is not allowed for a home office.
Chapter 3 Solutions
Income Tax Fundamentals 2020
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Which of the following formulas represents the...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Heather drives her minivan 953 miles for business...Ch. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Under the high-low method, the federal per diem...
Ch. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - Prob. 20MCQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - Prob. 23MCQCh. 3 - Stewie, a single taxpayer, operates an activity as...Ch. 3 - Prob. 2PCh. 3 - Lawrence owns a small candy store that sells one...Ch. 3 - Business with gross receipts of $25 million or...Ch. 3 - Teresa is a civil engineer who uses her automobile...Ch. 3 - Prob. 7PCh. 3 - Martha is a self-employed tax accountant who...Ch. 3 - Prob. 9PCh. 3 - Go to the U.S. General Services Administration...Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Marty is a sales consultant. Marty incurs the...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Cooper and Brandy are married and file a joint...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Cindy operates a computerized engineering drawing...Ch. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Lew is a practicing CPA who decides to raise...
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