Reference no: EM131061190
1. Matt operates a sole proprietorship and files his return on a calendar year basis. He took out a fire insurance policy for his business effective July 1, year 1, and paid a premium of 3,600 for 4 years. Matt reports his income and expenses on a cash basis. What is Matt's deductible insurance expense for Year 1?
2. Which of the following items generally cannot be deducted or amortized over its useful life or over a statuatory period?
a. commission to stockbrocker for issueing and selling initial stock offering
b. business start up costs
c. goodwill acquired as a part of a bulk purchase
d. attorney's fees paid in perfecting a patent application
3. Bill Thomas a sole proprietor incurred the following business expenses during the year. All are deductible except:
a. Interest paid on an individual's tax deficiency when the deficiency was related to income from a business
b. kickbacks, a violation of state law that is not generally inforced
c. postage and freight expenses
d. interest and taxes paid on vacant land held for invesment
4. Start up expenditures of a business may be amortized over a period of not less than:
a. 12 months
b. 24 months
c. 60 months
d. 180 months
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