4.S is a cash basis, calendar year taxpayer. She operates Cloth R Us. All the st

Question

4.S is a cash basis, calendar year taxpayer. She operates Cloth R Us. All the stores profits come from the sale of fabric. Sales are S2 million. During the year she paid the following expenses: 1. $3,000 premium for liability insurance covering her business. The coverage runs from December 1, 2017 through November 30, 2020. 2. $10,000 for cloth, all of which is still on hand at the end of the taxable year S. $2.000 for "points related to obtaining a loan for the purchase of her principal residence 4. $1,200 for "points" related to obtaining a loan on rental property S may deduct all the expense paid in 2017 for which item(s)? b. 1 and 2 c. 1,2, and 3 d. 1,3, and 4 der 5. Which of the following statements is true concerning deductions "for" and "from" adjusted gross income (A.GL)? a. A deduction from A.O.L has no effect on the taxpayer's self-employment tax liability b. Corporations, like individuals, must classify their deductions as deductions for and from A.GL c. Misclassification of a deduction for A.G.I. has no effect on the taxpayer's tax liability, assuming the taxpayer itemizes her or his deductions. d. Misclassification of a deduction for A.G.I. never has an effect on the taxpayer's medical expense deduction 0 this e as a 6. Which of the following is not a deduction for A.GL2 a. Lawn-mowing expense for a rental property actively managed by the taxpayer. b. Deductible expenses related to a physician's home office c. Employee transportation expense not reimbursed by the employer d. Employee transportation expense reimbursed by the employer and included in emp loyee's

Explanation / Answer

Q4 The Answer to this question should be (e) $ 2000 for "points" related to obtaining a loan for the purchase of her personal residence.

Q5 The answer to this question should be

(d) Misclassification of a deduction for A.G.I never has an effect on the taxpayer's medical expense deduction.

Q6 The answer to this question should be

(c) Employee transporation expense not reimbursed by the employer.

hence this is not a deducion for A.G.I

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