Assume Sarah is a cash-method calendar-year taxpayer. She made a $1,000 payment for next year’s property taxes on her place of business. What is the after-tax cost of this payment assuming she has a 28 percent marginal tax rate?
Assume Sarah is a cash-method calendar-year taxpayer. She made a $600 payment for dinner with out-of-town clients during contract negotiations. What is the after-tax cost of this payment assuming she has a 28 percent marginal tax rate?
This year Amy purchased $3,000 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipment into service during the year, she does not claim any depreciation expense for the equipment. After the accident, Amy sold the equipment to a junk shop for $500. What amount can Amy deduct for the loss of the equipment?