1. Crystal operates a business that provides typing and delivery services. This year, Crystal spent $2,610 to purchase special t-shirts that identify her employees and raise awareness for her business. The shirts are especially colourful and include logos on the front and back pocket. In addition to salary payments, Crystal also compensates its employees by offering to pay whole life insurance premiums for anyone who wishes to provide insurance coverage to their beneficiaries. This year, Crystal paid $5,550 in life insurance premiums. How much of these payments can Crystal deduct? Crystal is in the cash method and calendar year.

2. Rock Island Corporation generated taxable income (before deduction for domestic production activities) of $21 million this year. Total income included $5,600,000 of income from qualified productive activities. The business paid $540,000 in W-2 wages to generate income from qualified productive activity. What is Rock Island's domestic production activities deduction for the year?

3. Sandy Bottoms Corporation generated taxable income (before domestic manufacturing deduction) of $3.09 million this year. Total income included $2,350,900 of income from qualified productive activities. The business paid $460,900 in W-2 wages to generate qualifying productive activity income. What is Sandy Bottom's domestic manufacturing deduction for the year?

4. Mike operates a fish supplier as a sole proprietor under the accrual method. On March 1 ^of this year, Mike was awarded $17,400 for five equipping trips. This is the first time Mike has accepted such a payment and he is required to outfit one trip per year for the next five summers starting this year. How much income should Mike recognise in each of the next five years if he is trying to minimise his tax burden?

Answer rating: 100% (QA)

1 Crystals deductible expenses a Special tshirts The special tshirts purchased by Crystal are considered to be a uniform and are therefore deductible ... View the full answer