#25

George operates a business that generated revenues of $63 million and allocable taxable income of $1.38 million. Included in the computation of allocable taxable income were deductible expenses of $246,500 of business interest and $256,500 of depreciation. What is the maximum business interest deduction that George will be eligible to claim this year? Multiple Choice $564,900 $414,000 $1,636,500 $263,100 $337,050 Ajax Computer Company is an accrual-method calendar-year taxpayer. Ajax has never advertised in the national media prior to this year. In November of this year, however, Ajax paid $200 million for television advertising time during a "super" sporting event scheduled to take place in early February of next year. In addition, in November of this year the company paid $1,500,000 for a one-time advertising blitz during a professional golf tournament in April of next year. What amount of these payments, if any, can Ajax deduct this year? Multiple Choice $3.50 million only if the professional golf tournament is played before April 15 $1,500,000 $200 million No deduction can be claimed this year $3.50 million