Sam is a sole proprietor who owns, leases, and manages several apartment complex

Question

Sam is a sole proprietor who owns, leases, and manages several apartment complexes and office buildings. During the current year, Sam incurs the following expenses:


Required:
1. Which of these expenditures are deductible?
2. Are they for or from AGI deductions?

a. $200 in attorney's fees for title searches on a new property Sam has acquired.
b. $450 in legal fees in an action brought to collect back rents.
c. $500 to his CPA for the preparation of his federal income tax return. $400 is for the preparation of Schedule C (Profit or Loss from Business)
d. $300 in attorney's fees for drafting a will.

Explanation / Answer

a AGI Deductions b AGI Deductions c Deductible d AGI Deductions e Deductible

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