Bruce is employed as an executive and his wife, Marie, is a self-employed realtor.Besides Bruce's salary, Bruce and Marie own a warehouse that they rent to a local business for storage.This year they paid $1,250 for electric service in the warehouse.Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay.Marie paid a $45 fee to rent a safety-deposit box to store records associated with her realty operation.Which of the following is a true statement?

Question

Quizplus · Accepted Answer

The safety-deposit fee and the electric bill are deductible as business expenses for AGI because they were necessary and ordinary expenses for Marie's realty operation and the warehouse rental business. One-half of the Social Security tax may be deductible as an adjustment to income, but this was not one of the options provided. The self-employment tax itself is not deductible for AGI, but it may be deductible for calculating the self-employment tax deduction on the tax return.

Bruce Is Employed as an Executive and His Wife, Marie