In the current year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased a few years ago for $50,000, and when it was sold, it had accumulated depreciation of $20,000 and an adjusted basis of $30,000.
Robert and Becca file jointly. They have taxable income of $60,000 in 2018 (before considering any capital gains or losses). They have a long-term capital gain of $28,000 and a long-term capital loss of $17,000 on sales of stock in the current year.
Income is generally recognized when it is actually or constructively received and expenses are generally recognized when they are paid. In the current year, Johnice started a profitable bookkeeping business as a sole proprietor. Johnice made $38,000 in her first year of operation.
Welfare payments. Nicole is a student at USB Law School; she receives a $52,000 scholarship for 2018. Of the $52,000, $40,000 is used for tuition, $5,000 is used for books, and $7,000 is used for room and board.
False, If the LIFO method of inventory valuation is used for reporting taxable income, then the taxpayer must use LIFO when preparing his financial statements. The taxpayer must use either the FIFO or LIFO method of valuing inventory, depending upon which method reflects the actual goods the taxpayer has on hand.
If the husband and the wife are both clients, then the husband may receive a gift up to $25 per year and the wife may receive a gift up to $25 per year. There is a limitation of $25 per donee on the deduction of gifts to employees for length of service.
1. Moving household goods and personal effects. 2. Traveling from the former residence to the new place of residence. For purposes of the moving expense deduction, traveling includes lodging, but not meals, for the taxpayer and household members.
Note (2): Travel expenses are defined as ordinary and necessary expenses incurred in traveling away from home in pursuit of the taxpayer's trade or business. These expenses are deductible as long as they can be substantiated and are not lavish or extravagant.
If an employer makes a contribution to a qualified retirement plan on behalf of an employee, the amount is currently deductible by the employer, and the employee must include the amount in gross income at the time the contribution is made. False.