1: Donald, a cash basis dentist, had $7,000 of uncollectible accounts receivable in 2013. Because Donald had always been a cash basis taxpayer, he had not reported the $7,000 in taxable income when the services were performed. How much of the $7,000 bad debt can Donald take as a bad debt deduction on his 2013 tax return? Explain.
2.Walt and Jackie rent out their residence in San Diego to friends for 10 days while they vacation in Europe. They collect $1,000 of rental income. How is the rental income treated on their tax return? Explain.
3. Chris opens a chiropractic office in Houston on January 1, 2013. In 2013, Chris drives a total of 4,195 miles from his office to clients' homes to do chiropractic adjustments. In addition, he drives a total of 3,000 miles for commuting between his home and his office in 2013. He elects to use the standard mileage method. On January 1, 2013, Chris purchases an annual subscription to a chiropractic journal for $200 and a 1-year medical reference service for $500. Calculate Chris's deduction for the above items for the 2013 tax year.