Tax Accounting Business Guide Flashcards

Learn, Study, and Revise the key terms, words, and much more for the Tax Accounting Business Guide with our quiz-based flashcards quizzes. Learn key terms, functions, and much more related to the Tax Accounting Business Guide with the help of our flashcards quizzes with ease. ​

12 cards   |   Total Attempts: 1787
  

Cards In This Set

Front Back
Limitations on business deductions- expenses against public policy, no deduction for the following:
-fines, penalties, illegal bribes, illegal kickbacks, any payment for illegal services or goods
Political contributions and most lobbying costs (are, are not) deductible
Are not
Expenses relating to tax-exempt income:Interest expenses on loan where proceeds invested in municipal bonds (are, are not) deductible.Life Ins. premiums paid for officers or other key employees that compensate business due to a key employee's death (are, are not) deductible.
Are notare not
Use the ____ rule for capital expenditures.
12 month rule- deduct if benefit less or equal to 12 months and benefits do not extend beyond end of next tax year
12 month rule for prepaid capital expenditures does not apply to
Rent or interest.
Ben makes following payments on June 30 of this year:-pays $10,000 for next 10 months of utilities-pays $12,000 for insurance over next 24 months-pays $9,600 for next 8 months of rent
-deduct all $10,000 because benefit less than 12 months and ends prior to end of next year-deduct $3000($500/mo X 6 months)-Deduct $7,200($1,200/mo X 6 months)-12 month rule does not apply to rent or interest
___% of meals and entertainment from business interaction is deductible as long as 1) 2) 3) .
50%1-amt is reasonable2-taxpayer or employee must be present for meal3-meal must be associated with conduction of business
Travel and transport deduction:Deduct cost of travel and transportation for business purposes. If travel is business and personal, only business days are deductible. If > 50% trip is business then___% of all transportation is deductible. If less than 50% ___% is deductible.SMR:Jan 1.-June 30- $0.51/mileJuly 1-Dec. 31- $0.555/mile
100%, 0%
Ben paid following to attend business meeting in Chicago: Airfare- $1,200 Hotel(3 nights)- $750, Meals(3 days)-$2701) What amounts are deductible if Ben spent two days in meetings?2)What amounts are deductible if Ben spent one day in a meeting?
1) $1200+$500+$90=$1790 (all or none, 250/day, 90/day X 50%)2) $0+$250+$45=$295 (all or none, 250/day, 90/day X 50%)
Property Use- some assets may be used for both business and personal purposes(car, phone, computer). Expenses are allocated based on
...business use %.
Start-Up expenditures are...
Capitalized and immediately expensed
Businesses are allowed to deduct bad debt expense when..It is only deductible for __ method taxpayers
..the debt becomes worthless or uncollectible.-accrual