When considering a principal residence as a tax shelter, remember that you can
A) purchase a house and deduct the mortgage interest.
B) maintain and improve your home, as $500,000 of capital gains for couples and $250,000 of capital gains for single filers is exempt from taxation.
C) take out a home equity loan to pay for other debts, such as auto financing.
D) use all of these tax-saving strategies.
E) only A and C.
Answer: D
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To prepare a statement of cash flows (indirect method), which of the following items should be added back to net income to derive "cash flow from operating activities?"
A. Depreciation expense. B. Increase in accounts receivable. C. Loss on a sale of equipment. D. Two of the above are correct.