For Each of the Following Situations, Determine Whether the Item

question 49

Essay

For each of the following situations, determine whether the item is deductible, how it would be deducted on the taxpayer's return (if there are alternatives possible, discuss the conditions which would determine the treatment) and any limitations which might be placed on the deduction.
a.Cassie sells insurance and other financial products for Bison Assurance Company. During the current year, she gives each client who has been with her for three years 2 tickets to a Willie Nelson concert. The tickets have a face value of $75 each, but Cassie has to pay $100 per ticket to obtain a block of 100 tickets. Cassie was out of town and did not attend the concert.
b.Randolph was the CEO and chairman of the board of directors of Vison Inc., until his retirement 5 years ago. Although he still owns 5% of Vison's stock, he has no other active involvement in the company. While playing golf one day he learns that 4 of the company's biggest customers are coming to town to close a big deal. Randolph had been responsible for bringing 3 of the customers to the business 30 years earlier when he started working for the company. Because he has developed a solid business relationship with them through the years and to help the company out, he holds a reception for the 4 customers and top executives of the company at his country club. The cost of the reception is $2,000. Randolph did not ask for, nor did Vison offer, a reimbursement for the reception.
c.Ai-leng is an engineer employed by Boiler Corporation. While having lunch with one of Boiler's clients, she learns of a new relaxation technique that the client felt had greatly reduced his job-related stress. Ai-leng enrolls in a night course at the local community college to learn the new relaxation technique. The cost of the course is $200.

Identify the common reasons behind small business failures and strategies to mitigate these risks.

Recognize the unique challenges and benefits associated with family businesses.

Comprehend the critical aspects of business planning, including necessary components of a successful business plan.

Distinguish between different types of business ownership and the legal implications of each.

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Definitions:

Preganglionic Neurons

Neurons of the autonomic nervous system that extend from the central nervous system to the autonomic ganglia.

Parasympathetic Division

Part of the autonomic nervous system responsible for rest and digestion functions, decreasing heart rate, and increasing intestinal activity.

Preganglionic Neurons

are neurons originating in the central nervous system that extend to autonomic ganglia, communicating signals to postganglionic neurons outside the central nervous system.

Pelvic Splanchnic Nerves

Nerves that arise from the sacral spinal cord, innervating the lower abdomen, pelvis, and contributing to the function of urinary and reproductive organs.