Sarah is single and self-employed realtor and is 42 years old. Her rental income is $90,000 on residential building and $70,000 on her office building. She pays $750 for health insurance.

Sarah drove her personal car 16,600 miles for business purposes and incurred $240 in parking fees, $310 in highway tolls, and $350 for automobile insurance premiums. Compute Sarah's deduction for automobile expenses on her current year tax return, assuming all of the above expenses are valid (standard mileage allowance method ).

Sarah uses a country club to entertain clients and spends the following amounts at the club:

Annual dues	$1,000
Personal meals	1,500
Business meals	2,500

(You need to calculate how much she can deduct against business income on her tax return.)

Sarah has the following items:

1. Interest expense of $8,000 on money borrowed to purchase tax-exempt securities.
2. A $6,000 unrealized decline in the value of stock held in an individual's investment portfolio.
3. A cost of $145 for having a federal income tax Schedule C prepared by an accountant (the business portion). She paid $500 in total for having her federal income tax return filed,

Compute regular MACRS depreciation for the following qualified assets. (Ignore bonus depreciation and Section 179.)

1. Business equipment purchased in February for $35,000 which has a salvage value of $5,000.
2. Apartment building (residential real estate) purchased in January for $280,000 with a salvage value of $20,000.
3. Office building purchased in October 2021 for $90,000 which has a salvage value of $10,000.

What is her taxable income? (Ignore Qualified Business Deduction but not self-employment taxes.) (30 points)

What are her taxes due (refund) if she has prepaid $41,000?

Answer rating: 100% (QA)

Sahrahs tax liability Particulars Amount Total rental income 160000 Less expenses allowed ... View the full answer