Required information [The following information applies to the questions displayed below.) Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $2,250 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,000. During the year, he drove his car a total of 14,200 miles (a combination of business and personal travel). Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. a. Ryan can provide written documentation of the business purpose for trips totaling 4,260 miles. What business expense amount can Ryan deduct (if any) for these trips? Maximum deductible amount

Required information [The following information applies to the questions displayed below.) Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $2,250 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,000. During the year, he drove his car a total of 14,200 miles (a combination of business and personal travel). Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. a. Ryan can provide written documentation of the business purpose for trips totaling 4,260 miles. What business expense amount can Ryan deduct (if any) for these trips? Maximum deductible amount

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 64P

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Lew is a practicing CPA who decides to raise bonsai as a business. Lew engages in the activity and has the following revenue and expenses: Sales $ 5,000 Depreciation on greenhouse 10,000 Fertilizer, soil, pots 1,500 What are the factors that the IRS will consider when evaluating whether the activity is a business or a hobby? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ If the activity is deemed to be a regular business, what is the amount of Lew's loss from the activity? $_____________ If the activity is deemed to be a hobby, what is the amount of Lew's expenses (if any) from the activity that may be deducted? $_____________
Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?
Marsha exchanged land used in her business in Florida with an FMV of 72,700 and an adjusted basis of 40,000 for land used in her business in Iowa with an FMV of 57,700. Marsha also paid 5,000 cash in the transaction and received an automobile worth 20,000. What is Marshas recognized gain on the transaction? a. 0 b. 15,000 c. 20,000 d. 32,700
On July 24 of the current year, Sam Smith was involved in an accident with his business use automobile. Sam had purchased the car for 30,000. The automobile had a fair market value of 20,000 before the accident and 8,000 immediately after the accident. Sam has taken 20,000 of depreciation on the car. The car is insured for the fair market value of any loss. Because of Sams history, he is afraid that if he submits a claim, his policy will be canceled. Therefore, he is considering not filing a claim. Sam believes that the tax loss deduction will help mitigate the loss of the insurance reimbursement. Sams current marginal tax rate is 35%. Write a letter to Sam that contains your advice with respect to the tax and cash flow consequences of filing versus not filing a claim for the insurance reimbursement for the damage to his car. Also prepare a memo for the tax files. Sams address is 450 Colonels Way, Warrensburg, MO 64093.