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Q: What is deductible as “actual car expense” when using a personal car for business purposes? A: Automobile expenses pertaining to a trade or business are deductible under the tax code as ordinary and necessary business expenses. Actual car expenses include: – Gasoline – Oil – Tires – Repairs – Insurance – Depreciation – Licenses [...]

Q: I lent money to a friend of mine in 2007. We had an agreement on paper and he made payments monthly until October 2009. After that he stopped returning my calls and now I find out that he has declared bankruptcy. Can I deduct bad debt expense on my 2009 tax return? A: Yes, [...]

Cancellation of debt is sometimes income and most of the time not. It all depends on the taxpayer’s situation. To better explain the issue, here is a question followed by an answer and reference. QUESTION In return for $10,000, Tom canceled John’s debt of $20,000. The cancellation of debt wasn’t a gift but part of [...]