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Question 11 7 pts Lawrence's part-time job at the car wash pays him an annual wage of $25,000. To supplement this income Lawrence started a new business catering on January 1, 2020. Lawrence is a 26-year-old, single, cash basis taxpayer who lives in Columbia, SC. Lawrence has no dependents. He hands you documentation for the following items. For each item, document how his business income is changed. If it is a deduction, please put a "-" in front of the number. Please do not use $ or commas. 1. He received $30,000 in revenue from clients. 2. He paid $3,000 in lobbying expenses to the catering lobbyists in Washington, D.C. in 2020. 3. He purchased equipment for $15,000. Depreciation for tax purposes on the equipment is $2,500. 4. He spent $22,000 in raw ingredients for his dishes. 5. 5. His van, which has the sole purpose of delivering food to clients, caught fire during the year, it was completely destroyed. The adjusted basis of the van was $6,000. The decline in the FMV of the van from the fire is $3,000. 6. Because Lawrence parked his van illegally, he had to pay $500 in parking tickets during the year. 7. Lawrence had a catering event in Washington, D.C. that lasted a week (7 days). On one of the catering event days in D.C. he took a day-long advanced cake decorating class taught by a famed decorator in DC. He extended his trip by 3 additional days to visit the national monuments, for a total trip length of 10 days. His unallocated expenses from this trip are as follows: 1. Airfare: $300 2. Hotel: $1,000 3. Food: $200 4. Incidentals: $60 5. Tickets to Monuments $20 6. Cake Decorating Class $250 Question 11 7 pts Lawrence's part-time job at the car wash pays him an annual wage of $25,000. To supplement this income Lawrence started a new business catering on January 1, 2020. Lawrence is a 26-year-old, single, cash basis taxpayer who lives in Columbia, SC. Lawrence has no dependents. He hands you documentation for the following items. For each item, document how his business income is changed. If it is a deduction, please put a "-" in front of the number. Please do not use $ or commas. 1. He received $30,000 in revenue from clients. 2. He paid $3,000 in lobbying expenses to the catering lobbyists in Washington, D.C. in 2020. 3. He purchased equipment for $15,000. Depreciation for tax purposes on the equipment is $2,500. 4. He spent $22,000 in raw ingredients for his dishes. 5. 5. His van, which has the sole purpose of delivering food to clients, caught fire during the year, it was completely destroyed. The adjusted basis of the van was $6,000. The decline in the FMV of the van from the fire is $3,000. 6. Because Lawrence parked his van illegally, he had to pay $500 in parking tickets during the year. 7. Lawrence had a catering event in Washington, D.C. that lasted a week (7 days). On one of the catering event days in D.C. he took a day-long advanced cake decorating class taught by a famed decorator in DC. He extended his trip by 3 additional days to visit the national monuments, for a total trip length of 10 days. His unallocated expenses from this trip are as follows: 1. Airfare: $300 2. Hotel: $1,000 3. Food: $200 4. Incidentals: $60 5. Tickets to Monuments $20 6. Cake Decorating Class $250

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