Diana Cohen received the following revenue during the year (she uses the cash method of accounting)....

Diana Cohen received the following revenue during the year (she uses the cash method of accounting). Consulting revenue reported to her on a Form 1099-MISC, Box 7 High-end Retail $32,000 Jensen’s Health Products $8,500 Strategic Solutions $3,750 Board of director compensation reported to her on a Form 1099-MISC, Box 7 Natural Sunshine, Inc. $6,500

During the year, Diana paid the following business expenses: Consultant-related: Airfare $2,900 Hotel $1,450 Meals $390 Parking $320 Diana drove 290 business miles for her consulting-related activities (she has documentation to verify) Board of Director-related: Meals $125 Hotel $225 Diana drove 315 business miles for her board of director activities (she has documentation to verify) Neither of Diana’s business activities required the filing of Form(s) 1099 to report payments she made during the tax year. In addition, Ms. Cohen drove a 2014 Lexus purchased on January 1, 2014 for all her business mileage. She drove the vehicle a total of 10,605 miles during the year for all purposes. Diana has written documentation to support the mileage amounts. She also has access to another vehicle for personal purposes.

Expert Solution

The tax year is not mentined here hence it is assumed that tax year is 2019.

For 2019 tax year the standard mileage claim were 58 cents per business mile droven.

Also it is not clear from the question what is required, in absence it is assumed that net income computation is required for both income which works out to : 45,775.80 (39,746.80+6,029.80)

Consulting revenue	Amount	Eligible expense	Basis of Calculation
Highend Retail	32,000.00
Jensen’s Health Products	8,500.00
Strategic Solutions	3,750.00
Total Consulting Income	44,250.00

Consultant-related Expenses
Airfare	2,900.00	2,900.00
Hotel	1,450.00	725.00	1450*50%
Meals	390.00	390.00
Parking	320.00	320.00
Mileage Claim		168.20	290*0.58
Total Expenses		4,503.20
Net Income from Consulting		39,746.80

Particular	Amount	Eligible expense	Basis of Calculation
Board of director compensation	6,500.00
Board of Director-related expense
Meals	125.00	62.50	125*50%
Hotel	225.00	225.00
Mileage Claim		182.70	315*0.58
Total Expenses		470.20
Net Income from Board of director compensation		6,029.80

ekkarill92 answered 1 year ago

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Diana Cohen received the following revenue during the year (she uses the cash method of accounting)....

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