Business, 15.02.2021 20:30 mkn3347

Elisa and Clyde operate a retail sports memorabilia shop. For the current year, sales revenue is $55,000 and expenses are as follows: Cost of goods sold $21,000
Advertising 1,000
Utilities 2,000
Rent 4,500
Insurance 1,500
Wages to Boyd 8,000

Elisa and Clyde pay $8,000 in wages to Boyd, a part-time employee. Because this amount is $1,000 below the minimum wage, Boyd threatens to file a complaint with the appropriate Federal agency. Although Elisa and Clyde pay no attention to Boyd's threat, Chelsie (Elisas mother) gives Boy a check for $1,000 for the disputed wages. The retail shop is the only source of income for Elisa and Clyde.

Required:
a. Calculate Elisa and Clyde's AGI.
b. Can Chelsie deduct the $1,000 payment on her tax return?

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Elisa and Clyde operate a retail sports memorabilia shop. For the current year, sales revenue is $55...

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