Reference no: EM132170030

Question -

Q1. A taxpayer buys tickets to an event that he does not attend with his client. Which of the following statements is true?

The taxpayer can deduct 100% of the cost of the tickets as a business gift.

The taxpayer can deduct up to $25 of the costs of the tickets as a business gift.

The taxpayer can deduct up to 50% of the cost of the tickets as a business gift.

The taxpayer can deduct 50% of the costs of the tickets as entertainment expense.

Q2. A cash-basis sole proprietor had the following cash receipts and disbursement for the year:

Net sales$80,000

Cost of goods sold 40,000

Operating expenses 20,000

Employee payroll taxes 3,000

Dividend income 900

Interest income from a personal savings account 200

What is the amount of reported net profit reported on Schedule C?

$15,000

$17,000

$18,000

$20,000

$40,000