Reference no: EM131717964

Question -

Business Gifts and Entertainment. Stu is self-employed. During the year, she paid $60 for a concert ticket. He gave the ticket to a client.

• What amounts can Stu deduct if he did not attend the event with the client?
• What amount can Stu deduct if he were to attend the event with his client?

Bad Debt Expense. Mickey is self-employed. In 2015, Mickey loaned a business associate $10,000 so that the associate could stay in business . Mickey's business would suffer if his associate went out of business. In 2016, the business associate filed for bankruptcy and Mickey was told that he might not receive more than $1,000 back from the loan. In 2017 Mickey receives $800 from the bankruptcy court. Discuss the tax consequences of the loan to Mickey, including the amount and year in which he can take a bad debt deduction.

Home Office Expense. Rita operates a childcare service in her home. The rooms used for this purpose constitute 30% of the total living space of the home. Expenses of operating the home during the yer included electricity, $3,600; water, $340; gas heating, $480; property taxes, $4,000; and home repairs, $800. The depreciation on the rooms used for childcare was $1,800. What is the total amount of expenses that Rita can deduct for using her own home to provide the childcare services if she uses these rooms 2,000 hours in 2016 for her childcare business?