CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 78IIP
To determine
Ascertain the tax consequences for the situation, whether the Company M’s trip is deemed to be a business expense or a lobbying expenditure.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
preti is working at the local private hospital as an admin assistant. She would like a career in nursing so she enrolled in a Bachelor of Nursing degree hoping to eventually get a job as a nurse at this same private hospital. During the 2020 tax year Preti spent $20,000 on university fees (not HECS) and $500 on various books and stationery. She also studied a refresher course on hospital administration which cost $2,500 (not HECS) during the 2020 tax year.
Advise Preti what tax deductions she may be able to claim for the year ended 30 June 2020.
Your answer should refer to decided cases and legislation
Harold Monette vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent two days at the Sierra University Hospital. Monette’s insurance company received a $4,950 bill for his two-day stay. One item that caught Monette’s attention was a $10.60 charge for a roll of cotton. Monette is a salesman for Johnson & Johnson and knows that the cost to the hospital of the roll of cotton is between $2.45 and $3.25. He asked for a breakdown of the $10.60 charge. The accounting office of the hospital sent him the following information:
a. Invoiced cost of cotton roll = $ 2.65
b. Cost of processing of paperwork for purchase = 0.57
c. Supplies-room management fee = 0.74
d. Operating-room and patient-room handling costs = 1.62
e. Administrative hospital costs = 1.06
f. University teaching-related costs = 0.61
g. Malpractice insurance costs = 1.18
h. Cost of treating uninsured patients = 1.52
i. Profit component = 0.65
Total = $10.60
Monette believes the…
Harold Monette vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent two days at the Sierra University Hospital. Monette’s insurance company received a $4,950 bill for his two-day stay. One item that caught Monette’s attention was a $10.60 charge for a roll of cotton. Monette is a salesman for Johnson & Johnson and knows that the cost to the hospital of the roll of cotton is between $2.45 and $3.25. He asked for a breakdown of the $10.60 charge. The accounting office of the hospital sent him the following information:
a. Invoiced cost of cotton roll = $ 2.65
b. Cost of processing of paperwork for purchase = 0.57
c. Supplies-room management fee = 0.74
d. Operating-room and patient-room handling costs = 1.62
e. Administrative hospital costs = 1.06
f. University teaching-related costs = 0.61
g. Malpractice insurance costs = 1.18
h. Cost of treating uninsured patients = 1.52
i. Profit component = 0.65
Total = $10.60
Monette believes the…
Chapter 5 Solutions
CONCEPTS IN FED.TAX.,2020-W/ACCESS
Ch. 5 - Prob. 1DQCh. 5 - Why does the computation of adjusted gross income...Ch. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What is the difference between a trade or business...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20DQCh. 5 - Prob. 21DQCh. 5 - Prob. 22DQCh. 5 - Prob. 23DQCh. 5 - Prob. 24DQCh. 5 - Prob. 25DQCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - Prob. 46PCh. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Hassad owns a rental house on Lake Tahoe. He uses...Ch. 5 - Ray, 83, is a used car dealer. He lives in a rural...Ch. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64PCh. 5 - Prob. 65PCh. 5 - Joy incurs the following expenses in her business....Ch. 5 - Prob. 67PCh. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - Prob. 70PCh. 5 - Prob. 71PCh. 5 - Prob. 72IIPCh. 5 - Prob. 73IIPCh. 5 - Prob. 74IIPCh. 5 - Prob. 75IIPCh. 5 - Prob. 76IIPCh. 5 - Prob. 77IIPCh. 5 - Prob. 78IIPCh. 5 - Prob. 79IIPCh. 5 - Prob. 80IIPCh. 5 - Prob. 81IIPCh. 5 - Prob. 91CPCh. 5 - Prob. 92DCCh. 5 - Prob. 93DCCh. 5 - Prob. 94DCCh. 5 - Prob. 95TPCCh. 5 - Allison and Paul are married and have no children....
Knowledge Booster
Learn more about
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
- Harold Monette vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent two days at the Sierra University Hospital. Monette’s insurance company received a $4,950 bill for his two-day stay. One item that caught Monette’s attention was a $10.60 charge for a roll of cotton. Monette is a salesman for Johnson & Johnson and knows that the cost to the hospital of the roll of cotton is between $2.45 and $3.25. He asked for a breakdown of the $10.60 charge. The accounting office of the hospital sent him the following information: a. Invoiced cost of cotton roll = $ 2.65 b. Cost of processing of paperwork for purchase = 0.57 c. Supplies-room management fee = 0.74 d. Operating-room and patient-room handling costs = 1.62 e. Administrative hospital costs = 1.06 f. University teaching-related costs = 0.61 g. Malpractice insurance costs = 1.18 h. Cost of treating uninsured patients = 1.52 i. Profit component = 0.65 Total = $10.60 Monette believes the…arrow_forwardChristina Haley of Elko, Nevada, age 57, recently suffered a stroke. She was in intensive care for 3 days and was hospitalized for 10 more days. Her total bill for this care was $133,000. After being discharged from the hospital, she spent 25 days in nursing home at a cost of $240 per day. Christina, who earns $4,500 per month, missed two months of work. Christina had a health insurance plan through her employer. The policy had a $1,000 deductible and an 80/20 coinsurance clause with a $2,000 coinsurance cap. She had also accumulated 21 sick days (equivalent to one month) at work. Otherwise she had no long-term care or disability income insurance. Round your answers to the nearest dollar. a. How much of Christina's direct medical expenses was paid by her insurance policy? $ b. What did Christina have to pay for her nursing home care? $ c. How much income did Christina lose? $arrow_forwardChristina Haley of Elko, Nevada, age 57, recently suffered a stroke. She was in intensive care for 3 days and was hospitalized for 10 more days. Her total bill for this care was $132,500. After being discharged from the hospital, she spent 25 days in a nursing home at a cost of $290 per day. Christina, who earns $4,500 per month, missed two months of work. Christina had a health insurance plan through her employer. The policy had a $1,000 deductible and an 80/20 coinsurance clause with a $2,000 coinsurance cap. She had also accumulated 21 sick days (equivalent to one month) at work. Otherwise she had no long-term care or disability income insurance. Round your answers to the nearest dollar. How much of Christina’s direct medical expenses was paid by her insurance policy? $ What did Christina have to pay for her nursing home care? $ How much income did Christina lose? $arrow_forward
- Stephanie was involved in a car accident and rushed to the emergency room. She received stitches for a facial and treatment for a broken finger. Under Stephanie PPO plan, emergency room care at a network hospital is 80 percent covered after the member has met a 300 annual deductible. Assume that Stephanie went to a hospital within her PPO network. Her total emergency room bill was 850. What amount did Stephanie have to pay? What amount did the PPO cover?arrow_forwardMr.Brittle fell at a Metallica concert and injured his wrist, He earned $56,000 as a manager at Fed Tx. As a result of his fall, he paid 9000 for a visit to the hospital emergency room and $1500 for follow-up visits with his doctor. He also paid $550 for prescription medicine and $600 to a physical therapist for rehabilitation. Insurance reimbursed Mr.Brittle $2500 for these expenses. What is the amount Mr.Brittle can include in itemized deductions (after any AGI limitations)?arrow_forwardA reputable doctor quits his job, which pays $77,000 a year, to open a non-governmental organization (NGO) to serve the needs of orphans. His annual expenses for the NGO amounts to $62,700 for food and daily supplies, $9,400 for maintenance, and $1,800 for books. i. What is his opportunity cost of opening the NGO? ii. What core economic principles are considered in the doctor’s decision making?arrow_forward
- Dow, 42, is a manager for Winter Company. In addition to his $83,000 salary, he receives the following benefits from Winter during the current year: Winter pays all its employees' health and accident insurance. Premiums paid by Winter for Dow's health insurance are $1,500. Winter provides all employees with group term life insurance coverage equal to their annual salary. Premiums on Dow's $83,000 in coverage are $830. Winter has a flexible benefits plan in which employees may participate to pay any costs not reimbursed by their health insurance. Dow has $2,700 withheld from his salary under the plan. His actual unreimbursed medical costs are $3,360. Winter pays Dow the $2,700 paid into the plan during the year. All management-level Winter employees are entitled to employer-provided parking. The cost of Dow's parking in a downtown garage is $3,500 for the year. Winter pays Dow’s $150 monthly membership fee to a private health club located in the building in which Dow works. Dow uses…arrow_forwardHilda received a research grant from the University of Timberland in amounts of $10,000 for her time and $3,000 for related supplies and expenses. She purchased a $28,000 Audi the day after depositing the school’s check. Hilda is a candidate for a PhD in philosophy and ethics. What is her gross income from the grant? Where did you locate your answer? If you located a case, Administrative Interpretation(s) or IRC section, is the authority still valid?arrow_forwardCarmen had worked for Sparrow Corporation for thirty years when she died of a heart attack at age 60. She was practically penniless at the time of her death, owed a $12,000 hospital bill, and had a disabled spouse. The company was very concerned about its public image, and rather than run the risk of embarrassment from one of its long-term employees dying and leaving her spouse with insufficient means, the Board of Directors agreed to pay Carmen’s hospital bill and to give her spouse $6,000 per year for the rest of his life. Discuss both sides of the question whether Carmen (or her estate) and her spouse realize any taxable income from the above.arrow_forward
- Annie Russell, a student at Tech, plans to open a hot dog stand inside Tech's football stadium during home games. There are seven home games scheduled for the upcoming season. She must pay the Tech athletic department a vendor's fee of $3,000 for the season. Her stand and other equipment will cost her $4,500 for the season. She estimates that each hot dog she sells will cost her $0.35. She has talked to friends at other universities who sell hot dogs at games. Based on their information and the athletic department's forecast that each game will sell out, she anticipates that she will sell approximately 2,000 hot dogs during each game. What price should she charge for a hot dog in order to break even? ||arrow_forwardAnnie Russell, a student at Tech, plans to open a hot dog stand inside Tech's football stadium during home games. There are seven home games scheduled for the upcoming season. She must pay the Tech athletic department a vendor's fee of $3,000 for the season. Her stand and other equipment will cost her $4,500 for the season. She estimates that each hot dog she sells will cost her $0.35. She has talked to friends at other universities who sell hot dogs at games. Based on their information and the athletic department's forecast that each game will sell out, she anticipates that she will sell approximately 2,000 hot dogs during each game. What price should she charge for a hot dog in order to break even (type number only, two decimals, no text or dollar symbol)?arrow_forwardAn organization of high school seniors performs services for patients at Leer Hospital. These students are volunteers and perform services that the hospital would not otherwise provide, such as wheeling patients in the park and reading to patients. These volunteers donated 5,000 hours of service to Leer in 2017. At the minimum wage rate, these services would amount to $22,500, while it is estimated that the fair value of these services was $27,000. In Leer’s 2017 statement of revenues and expenses, what amount should be reported as nonoperating revenues?a. $27,000b. $22,500c. $6,250d. $0arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
- Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning