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A self-employed taxpayer who itemized deductions owns a home, of which 10% is used as the taxpayer's primary place of business. In the table below, enter in the shaded cells in column C the amount...

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A self-employed taxpayer who itemized deductions owns a home, of which 10% is used as the taxpayer's primary place of business.

In the table below, enter in the shaded cells in column C the amount allocated to the taxpayer's Schedule C, Profit or Loss form Business. Then, in column D, enter the associated amount to be included on the taxpayer's Schedule A, Itemized Deductions. enter income as positive values and losses and expenses as negative values. If a response is zero, enter a zero (0). Assume that the home office safe harbor is not elected.

A1

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A

B

C

D

1

Income and expenses

Total amount

Amount allocated to Schedule C

Schedule A

2

Gross receipts

$50,000

3

Secretarial expenses

$24,000

4

Supplies

$200

5

Other business expenses

$18,000

6

Expenses related to the home

7

Property insurance

$5,000

8

Mortgage interest

$24,000

9

Real estate taxes

$10,000

10

Furnace repair

$2,000

11

Kitchen remodeling

$12,000

12

Utilities

$6,000

13

Cleaning services

$1,000

14

Depreciation (tax method for office portion only)

$4,000

15

Net income or (loss)

$0

Answered Same Day Dec 26, 2021

Solution

Robert answered on Dec 26 2021
119 Votes
Reliant Corp., an accrual-basis calendar-year C corporation, filed its 2016 federal income tax
eturn on April 15, 2017. The following two responses are required for each of the items 1
through 6.
ï‚· Determine the amount of Reliant's 2016 Schedule M-1 adjustment.
ï‚· Indicate if the adjustment increases, decreases, or has no effect, on Reliant's 2016 taxable
income.
Selections
I. Increases Reliant's 2016 taxable income.
D. Decreases Reliant's 2016 taxable income.
N. Has no effect on Reliant's 2016 taxable income.

Schedule
M-1
Adjustment
(I)/(D)/(N)
1. Reliant's disbursements included reimbursed employees'
expenses in 2016 for travel of $100,000, and business meals of
$30,000. The reimbursed expenses met the conditions of
deductibility and were properly...
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