Week 2 homework
4/25 Billy Dent, as the owner of an apartment building, receives and makes the following payments during 2012
5,000+4,000=9,000 that will be included
Rent received in January 2012, but due in December 2011 5,000
Rent received in December 2012, not due until January 2013 4,000
Total Income 9,000

4/32 Arnold and Barbara Cane were divorced in June 2012. Pursuant to the divorce decree, Arnold is obliged to perform as follows
A. Not affect their Taxable Income
B. Not affect their taxable Income. Mortgage Interest is not referenced. Payments are not considered alimony.
C. Barbara doesn’t need to file alimony 9,000 is not tax deductible
5/26 Fluent, an investor in stocks and bonds, wanted to increase his portfolio but wanted to minimize his tax liability on the income from the bonds.
EE bonds, because Interest received on bonds is generally excludable from gross income. They are an accrual-type security, which means interest is added to the bond monthly and paid when you cash in the bond. This includes no state or local taxes on series ee bonds, as well as the opportunity to generate tax deferred earnings by exchanging the bonds for other types.

6/29 Which of the following trade or business expenditures of Ajax Inc. If an expenditure is not deductible, explain why it is not a valid deduction A salary is an expenditure because the amount paid to employees for services.
New office build is an expenditure because it can should be capitalized, as the improvements will cause the value of the asset to be increased and may lengthen the time that the asset can be used.

Payments of illegal parking, because not necessary to the production of income. Not deductible
Wedding expense, is not deductible because it’s not generating income.