ACC AGI Calculation. 39. David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice. He is single and 63 years old. His AGI (without consideration of consulting income) is $45,000. Other informationfollows:
| Income from consulting business | $4,000 |
| Consulting expenses other than home office | 1,500 |
| Total costs relating to home: | |
| Interest and taxes | 6,500 |
| Utilities | 1,500 |
| Maintenance and repairs | 450 |
| Depreciation (business part only) | 1,500 |
Calculate David’s AGI:
51. Jose purchased a vehicle for business and personal use. In 2013 he used the vehicle 18,000 miles (80%) for business and calculated his vehicle expenses using the standard mileage rate (mileage was incurred ratably throughout the year). He paid $1,400 in interest and $150 in property taxes on the car. Calculate the total business deduction related to the car:
53. Derrick owns a farm in eastern North Carolina. A hurricane hit the area and destroyed a farm building and some farm equipment and damaged a barn.
| Item | Adjusted basis | FMV before damage | FMV after damage | Insurance proceeds |
| Building | $85,000 | $115,000 | $0 | $55,000 |
| Equipment | 68,000 | 49,000 | 0 | 15,000 |
| Barn | 95,000 | 145,000 | 95,000 | 35,000 |
Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return withhis wife, had $45,000 of taxable income last year. Their taxable income for thecurrent year is $150,000, excluding the loss from the hurricane. Calculate the amount of the loss deductible by Derrick and his wife and the years in which they should deduct the loss.
(Hint: Chapter 5 providesinformation concerning nationally declared disaster areas.)
55. Eric, who is single, participates in an activity that is appropriately classified as a hobby. The activity produces the following revenue and expenses:
| Revenue | $12,000 |
| Property taxes | 2,000 |
| Materials and supplies | 4,000 |
| Utilities | 1,500 |
| Advertising | 1,900 |
| Insurance | 775 |
| Depreciation | 5,000 |
Without regard to thisactivity, Eric’s AGI is $55,000. Determine how much income Eric must report, the amount of the expenses he is permitted to deduct, and his AGI:
56. In 2013 Landon has self-employment earnings of $195,000. Compute Landon’s self-employment tax liability and the allowable income tax deduction of the self-employment tax paid.
SE tax:_______________________
SE deduction: __________________________
