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 $45 fee to rent a safe deposit box to store records associated with her realty operation. Which of the following is a true statement?

Question

Quizplus · Accepted Answer

- The safe deposit fee and the electric bill are deductible for AGI as they are ordinary and necessary expenses for Marie's realty operation and the rental property.
- Only one-half of the Social Security taxes are deductible, but it is a deduction from AGI, not for AGI.
- The self-employment tax is also deductible, but it is a deduction from AGI, not for AGI.
Therefore, Choice D is the best answer as it correctly identifies the deductible expenses for AGI.

Bruce Is Employed as an Executive and His Wife, Marie