Jack owns a local carpeting business in Portland. The business is comprised of 3 employees, not including
Question:
Jack owns a local carpeting business in Portland. The business is comprised of 3 employees, not including Jack. At year-end, Jack is preparing his own business taxes, for which he needs to figure out which business expenses are deductible and which should be capitalized. Jacks business incurs the following expenses: - Life insurance policies were taken out in the amount of $3,000 per employee (excluding Jack), Jack is the beneficiary of these policies. - State and local sales taxes pertaining to the purchase of a long-lived capital asset during the year totaling $6,200 were paid. - State and local real estate and personal property taxes in the amount of $5,100 were paid. - One of Jacks clients failed to pay their bill in a timely manner, and Jack decided to sue them on behalf of the business. Attorney fees in regards to this matter totaled $2,500.
In total, how much can Jack deduct for his business in regards to the previous statements? What amount should be capitalized to the property of the business?
Cost Accounting And Financial Management For Construction Project Managers
ISBN: 9781138550650
1st Edition
Authors: Len Holm