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David Purchases a Yacht Solely for the Purpose of Entertaining

question 25

Essay

David purchases a yacht solely for the purpose of entertaining real estate clients.He wishes to position himself as a high-end real estate salesperson specializing in very expensive residences and uses the yacht only for business entertainment.During 2017,his expenses for maintaining and operating the yacht,including depreciation,were $28,000.In addition,he incurred $9,000 of catering expenses for meals he provided to business clients on the yacht.What is David's tax deduction in 2017?

Explain.


Definitions:

Portfolio Beta

A measure of a portfolio's sensitivity to market movements, indicating its volatility relative to the market.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically represented by the yield on government securities like U.S. Treasury bonds.

Sample Standard Deviation

A measure of the dispersion or variability in a subset of data from its mean, used to estimate the standard deviation of the entire population.

Returns

The profit or loss derived from investing in or owning an asset over a given period.

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