Questiongeorge large worked as a salesman for toyboat inc

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Reference no: EM13348706

Question:

George Large worked as a salesman for Toyboat, Inc. He received a salary of $80,000 ($8,500 of federal income taxes withheld and $1,800 of state income taxes withheld) plus an expense reimbursement from Toyboat of $5,000 to face his employer business expense. George has to make an adequate accounting to his employer and return any excess reimbursement. Moreover, Toyboat gives George with medical insurance worth $7,200 per year. George drove his car 24,000 miles during the year, and he placed the car in service on June 1, 2010. His log shows that 18,000 miles were for sales calls to customers at the customers' offices and the remainder was personal mileage. George uses the standard mileage rate method. Consider his business miles were driven equally during the year. George is a professional basketball fan. He purchased two season tickets for a total of $4,000. He takes a customer to each game, and they discuss some business before, during, and after the games. George also takes clients to business lunches. His log shows that he spent $1,500 on these business meals. George also took a five-day trip to the Toyboat headquarters in Musty, Ohio. He was so well-prepared that he finished his business in three days, so he spent the other two days sightseeing. He had the subsequent expenses during each of the five days of his trip:

Airfare $200

Lodgoing $85/day

Meals $50/day

Taxicabs $20/day

Marge Large is self-employed. She repairs rubber toy boats in the basement of their home, which is 25% of the house's square footage. She had the subsequent income and expenses:

Income from rubber toy boat repairs $15,000

Cost of suppliers 5,000

Contract labor 3,500

Long-distance phone calls (business) 500

The Large's home cost a total of $150,000, of which the cost of the land was $20,000. The FMV of the house is $225,000. The house is depreciable over a 39-year recovery period. The Larges incurred other expenses:

Utility bills for the house $2,000

Real estate taxes 2,500

Mortgage interest 4,500

Cash charitable contributions 3,500

Prepare Form 1040, Schedules A, C and SE for Form 1040, and Forms 2106 and 8829 for the 2011 year.

Reference no: EM13348706

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