90.2K

Verified Solution

Link Copied!

For AGI deductions of individual taxpayers that are connected with either a trade or business or a rental activity are reported differently than other for AGI deductions reported as Adjustments to Income on Schedule $1$ of Form $1040.$ Explain the difference as to how the two groups are reported for tax purposes.

Question content area bottom

Part $1$

A$.$

Expenses of a$$ self$-$employed individual are netted against the income from his business activity and the net amount is reported on Schedule F$.$ The net amount of income from Schedule F is then reported on Line $12$ of Schedule $1$ of Form $1040.$ A similar reporting procedure is also followed for Schedule C for rental real estate and Schedule E for a farm. Other types of for AGI deductions are merely listed as Adjustments to Income on Schedule $1$ of Form $1040.$

B$.$

Expenses of a$$ self$-$employed individual are listed as Adjustments to Gross income on Schedule $1$ of Form $1040.$ Other types of for AGI deductions are listed on Schedule $1$ of Form$1099-$R$.$

C$.$

Expenses of a$$ self$-$employed individual are reported Schedule $1$ of Form$1099-$R$.$ Other types of for AGI deductions are listed as Adjustments to Income on Schedule $1$ of Form $1040.$

D$.$

Expenses of a$$ self$-$employed individual are netted against the income from his business activity and the net amount is reported on Schedule C$.$ The net amount of income from Schedule C is then reported on Line $3$ of Schedule $1$ of Form $1040.$ A similar reporting procedure is also followed for Schedule E for rental real estate and Schedule F for a farm. Other types of for AGI deductions are merely listed as Adjustments to Income on Schedule $1$ of Form $1040.$

Answer & Explanation Solved by verified expert

See Answer