Please answer question 1 There is no additional information this is the only inf
ID: 2520888 • Letter: P
Question
Please answer question 1
There is no additional information this is the only information
1. This question is worth 16 points Q is single, age 35 and started a new business on 1/15/2017; he trains sports announcers. Following ane various transactions for 2017: a) He purchased a commercial office building on 2/1/2017; the cost of the building and land was $250,000 (building 80% of the cost, the land 20% of the cost) b) Q purchased office furniture on 2/15/2017 for $10,000. He does not take the section 179 deduction, but does elect to take the 50% bonus depreciation. c) Q has the following income and expenses related to this business: Income Mortgage interest Property taxes Utilities Supplies and fees Telephone Estimated tax payments - Federal $130,000 8,000 2,000 5,000 8,000 2,000 15,000 Requirements 1. Are business expense deductions FOR AGI or FROM AGI? 2. Calculate depreciation expense for the building and the office furniture. Your following: class life, convention used, depreciation table, and a detailed calculation 3. Prepare Form 4562. 4. Prepare Schedule C 5. What is the new tax law for reporting income of a sole-proprietor? How will it affect Q in 2018? 6. If Q sells the office furniture on 9/20/18 for $6,000, what is his gain or loss? Your answer should include the following: depreciation calculation for 2018, calculation of adjusted basis, calculation of gain or loss answer should include theExplanation / Answer
Business expenses are incurred for earning the business income and therefore the business expenses will always be deductions for AGI.