[The following information applies to the questions displayed below.] Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5 million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of depreciation, and $2 million deduction for a net operating loss carryover. Required: b-1. What is the maximum amount of business interest expense that Renee can deduct this year? b-2. How is the disallowed interest expense (if any) treated? Interest disallowed would be:
[The following information applies to the questions displayed below.] Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5 million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of depreciation, and $2 million deduction for a net operating loss carryover. Required: b-1. What is the maximum amount of business interest expense that Renee can deduct this year? b-2. How is the disallowed interest expense (if any) treated? Interest disallowed would be:
Chapter3: Business Income And Expenses
Section: Chapter Questions
Problem 22MCQ
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT