Tax

Question 1

What type of interest is deductible without limit on a business owners tax return?

Answer 1

Business investment interest paid

Question 2

On what tax forms are S corporation distributions normally received by individuals?
A) schedule K-1 of the 1041
B) schedule K-1 from Form 1065
C) Schedule K-1 of 1120S
D) 1099
E) Schedule E

Answer 2

C. Form K-1 of 1120S is to report S corps distributions. K-1 of 1041 is trusts abs estates. Form 1099 is for self-employed income. K-1 of 1065 is partnerships. Schedule E is for reporting of K-1 income from real estate.

Question 3

Which of the following are allowable deductions for AGI?
I. Net Business Losses
II. Real estate taxes paid
III. Net Capital losses
IV. Alimony receive from a divorce that was finalized in 2008
V. Casualty losses not reimbursed by insurance

Answer 3

I. Net business losses and
III. Net capital losses