>> Accounting Basics
Problem: Ken's position with ABC, Inc. requires a good deal of driving. The company provides a car for this purpose. Ken's out-of-pocket travel expenses are reimbursed by ABC, Inc. under an account able plan. Ken is six foot, five inches tall and the compact cars the company provides make for an uncomfortable ride on longer trips. So, on days when Ken must travel longer distances he uses his own vehicle and keeps track of his mileage. Prior to coming into your office this year, Ken has been filing his own return and deducting the business use of his car using the standard mileage rate. You ask Ken why he has been deducting the mileage subject to the 2% AGI limitation when ABC, Inc. has an account able plan. He explains that ABC, Inc. is a small company and he doesn't turn in the mileage because he feels guilty about them paying extra just because he's tall and prefers his own car. He understands the 2% limitation, and is satisfied with the tax benefit he is able to receive using Form 2106.
Can Ken continue to deduct the business use of his vehicle on Form 2106?
Problem: How should Steve report this income and why?
Problem: Your client called to report that upon noticing water on the walls in three rooms of his home, he decided to check his roof and discovered holes in the roof. The holes were caused by squirrels that had eaten through the roof wood, permitting rain water to soak through down the house walls.
Can he claim a casualty loss for the cost of repairing the holes in his roof caused by squirrels?