# 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:

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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: __________________________