Question

Scott owns a welding business in alabama. every year, when he meets with his accountant to file his tax returns, he claims that he should be able to show a loss on his tax returns. his accountant always shows a profit on his tax returns. fully explain what scott's claim is based on.

Answer 1

For a loss to be shown on his tax return, the total expenses (prices of goods, supplies, transportation and so on) must be larger than the sale or revenue. 
Since he's always showing profit, this means that his revenue his more.

Scott may be including some illegitimate factors (factors that are not usually included in the calculation) in his calculations. These factors may lead to hypothetical loss for him.

Answer 2

For a misfortune to be appeared on his government form, the all out costs must be bigger than the deal or income. Since he's continually indicating benefit, this implies his income his more. Scott might incorporate some ill-conceived factors in his estimations. These components may prompt theoretical misfortune for him.  

Further Explanation:  

Example 1:  

Expecting that the bookkeeper is right all things considered, Scott is ascertaining his misfortune on costs or different elements that that would not be real conclusions or costs. A typical Example is vehicle mileage the citizen wishes to guarantee as business mileage yet by principle would be viewed as driving mileage.  

Example 2:  

Another Example would be things that Scott may wish to cost completely in this assessment year however by guideline they should be devalued. Scott could need to take a business utilization of his home yet have a misconception of what the standards are. There are many such regular issues when doing a business return and the customer does not comprehend the expense rules.

Subject: business

Level: college

Keywords: Example 1, Example 2.  

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