For Each of the Following Situations,determine Whether the Item Is

question 131

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 that would determine the treatment)and any limitations,which might be placed on the deduction.
a.Tony and Rika are married and file a joint return.Only Tony is covered by an employee-sponsored pension plan and their adjusted gross income is $186,000.Determine their maximum IRA contribution and deduction for the current year.
b.Elise graduated from Southern University in May of 2016 and immediately started working as a financial analyst for Simone Financial Group.To finance her college education,she borrowed $30,000 from a local bank.In January of 2017,she begins paying back her student loans and pays $2,400 of interest expense during the year.Her adjusted gross income for the year is $63,000.
c.During the current year,Rowland accepts a job as a computer programmer with Davenport Industries.He incurs the following expenses in moving from East Brunswick,New Jersey to Durham,North Carolina.Davenport Industries reimburses him $4,000 for his move.Transportation of household goods
$2,800
Airfare
340
Temporary living:
Lodging
430
Meals
120
House-hunting trip:
Transportation
330
Lodging
280
Meals
110

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Definitions:

Single Price Monopolist

A monopolist who charges all consumers the same price for its product, irrespective of the quantity purchased.

Profit-Maximizing Quantity

The level of output at which a company achieves the highest possible profit, determined by analyzing costs and revenues.

Marginal Revenue

The supplementary income earned by selling an additional unit of a good or service.

Negative

Referring to a less than zero value, indicating a deficit, loss, or detrimental condition in various contexts such as economic indicators or mathematical values.