Martin has a home office for his business as an agent for rock-and-roll bands. The business shows a loss of $2,000 before home office expenses. How should the home office expenses be treated?
a. Because of the business loss, home office expenses cannot be deducted and are lost forever.
b. Because of the business loss, home office expenses (other than mortgage interest and property taxes allocated to the office) cannot be deducted in the current year but can be carried forward to the next year.
c. The home office expenses increase the business loss in the year they are incurred and are fully deductible in that year.
d. The home office expenses increase the business loss in the year they are incurred and are 50 percent deductible in that year.
b
You might also like to view...
Which of the following best describes a balanced scorecard?
A. an arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust B. a combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay C. a performance review process where the organization collects feedback from customers, managers, and subordinates; assigns ratings; and lists them on the company's performance card D. a system designed to measure the performance of HR personnel based on the quality of recruitment E. a type of incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary
The failure to obtain a license required by a statute for revenue-raising purposes:
A. automatically declares the contract void for the protection of the public. B. affects the legality of the unlicensed person's agreements and it will be considered void. C. does not affect the legality of unlicensed persons' agreements. D. results in generally unenforceable contracts.
Changes in accounting principles generally are reported as
a. adjustments to current and/or prior period statements. b. extraordinary items. c. adjustments to current period statements only. d. adjustments to prior period statements.
Formal report writers conduct most of their research using primary sources
Indicate whether the statement is true or false