Question

___23. An employee of a nail salon is allowed a 20% discount on any nail services she purchases from the salon. In 2018, she purchased 24 manicures and 16 pedicures. The total cost would have been $1,400. The employee paid only $1,120 because she was an employee for all of 2018. The federal income tax treatment of the $280 discount is:

a. include gross income

b. deduct $280 from AGI if the standard deduction is not elected

c. exclude $280 from gross income

d. deduct $1,120 for AGI

e. deduct $280 for AGI

___24. Mindy pays no sales tax when she purchases a chair for $835 from a store in New Hampshire while visiting there to see the lovely foliage. New Hampshire does not impose a sales tax. Mindy lives in New York, where sales and use tax are imposed at a rate of 8%, and returns there with the chair. Mindy must

a. include $835 in her gross income

b. pay use tax equal to $66.80 to New York

c. pay sales tax equal to $66.80 to New Hampshire

d. purchase deed tamps to bring the chair to New York

e. all of the above

Answer 1

Answers :

23. An employee of a nail salon is allowed a 20% discount on any nail services she purchases from the salon. In 2018, she purchased 24 manicures and 16 pedicures. The total cost would have been $1,400. The employee paid only $1,120 because she was an employee for all of 2018. The federal income tax treatment of the $280 discount is:

d) Deduct $280 for AGI

20% of $1400 = $280 should deducted for Adjusted Gross Income

24. Mindy pays no sales tax when she purchases a chair for $835 from a store in New Hampshire while visiting there to see the lovely foliage. New Hampshire does not impose a sales tax. Mindy lives in New York, where sales and use tax are imposed at a rate of 8%, and returns there with the chair. Mindy must

b) b. pay use tax equal to $66.80 to New York