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Crystal Operates a Business That Provides Typing and Delivery Services

question 27

Essay

Crystal operates a business that provides typing and delivery services. This year Crystal spent $2,500 to purchase special shirts that identify her employees and provide some notoriety for her business. The shirts are especially colorful and include logos on the front pocket and back. Besides salary payments, Crystal also compensates her employees by offering to pay whole life insurance premiums for any that want to provide insurance coverage for their beneficiaries. This year Crystal paid $5,000 in life insurance premiums. What amount of these payments can Crystal deduct? Crystal is on the cash method and calendar year.


Definitions:

Unmarried Couple

A pair of individuals in a romantic relationship who live together but are not legally married.

Tenancy by the Entirety

A form of joint property ownership available only to married couples, where each spouse has an undivided interest in the property and right of survivorship.

Tenancy in Partnership

Tenancy in Partnership describes a form of ownership where partners possess an undivided interest in property owned by the partnership for the purpose of the partnership's business.

Tenancy in Common

A form of ownership where two or more individuals own property together, each holding a distinct, undivided interest.

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