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Brad Pitt, owner of a small car repair and engine service business, operates his business...

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Accounting

Brad Pitt, owner of a small car repair and engine service business, operates his business as a C corporation with a December 31 year-end. He has three employees, including himself. The following expenses, along with $565,000 of gross income, are reported in the corporations financial statements.

Employee 1 salary $ 28,000

Employee 2 salary 28,000

Brad Pitts salary 45,000

Building rent 24,000

New Machinery purchased for the year 100,000

Depreciation of machinery for the year 10,000

Insurance coverage for all assets in the business 5,000

Insurance coverage on Brad Pitts personal residence 3,000

Consulting Fees 5,000

Utilities 2,000

Taxes and Licenses 12,000

Fine paid to City 4,000

Advertising 3,000

Interest Expense 5,000

Charitable contributions 20,000

Political Contributions 27,000

Dues paid to Small Engine Repair Institute 1,000

Mileage on car for personal use 2,500

House Cleaning expenses on personal residence 1,000

Janitorial expense for business 5,000

Brad Pitt would like to know the amount of his deductible expenses for tax purposes.

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