Exam 23: Business Expenses and Deferred Compensation

In-home office expenses are deductible if the office is used exclusively on a regular basis as the principal place of business for any trade or business of the taxpayer.

Mirasol Corporation granted an incentive stock option to employee Josephine two years ago.The option price was $150 and the FMV of the Mirasol stock was also $150 on the grant date.The option allowed Josephine to purchase 160 shares of Mirasol stock.Josephine exercised the option this year when the stock's FMV was $250.Unless otherwise stated,assume Josephine is a qualifying employee.The results of the above transactions to Mirasol Corporation will be

A three-day investment conference is held in Las Vegas.Dr.Singh,a dentist,travels from Ohio to improve his taxable investment portfolio performance.Ms.Gondin,a financial planner,travels from Seattle to attend the same conference to improve her skills in managing her clients' investment portfolios.The same standards of deductibility will apply to both attendees.

Tyne is a 48-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan.Before IRA contributions,her AGI is $66,000 in 2019.What is the maximum amount she may contribute to a tax deductible IRA?

Richard,a self-employed business consultant,traveled from New Orleans to New York for both business and vacation.He spent 4 days conducting business and some days vacationing.He incurred the following expenses: Airfare $460 Lodging-per day 175 Meals-per day 100 Business Entertainment 800 What is his deduction under the following two circumstances? a.He spends three days on vacation,in addition to the business days. b.He spends six days on vacation,in addition to the business days.

A sole proprietor has met the requirements to deduct the costs of a home office.The deduction will be calculated on Schedule C.

All of the following individuals are allowed a deduction except

All of the following are true with regard to a Roth IRA except

All taxpayers are allowed to contribute funds to Health Savings Accounts to supplement their health insurance.

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2014.The option price was $150,and the FMV of the Martin stock was also $150 on the grant date.The option allowed Caroline to purchase 1,000 shares of Martin stock.The option itself does not have a readily ascertainable FMV.Caroline exercised the option on August 1,2018,when the stock's FMV was $250.If Caroline sells the stock on September 5,2019,for $300 per share,she must recognize

Tobey receives 1,000 shares of YouDog! stock as part of his compensation package.Tobey's employment contract with YouDog!,Inc.,states that if he leaves before completion of three years of employment,he will forfeit the stock.The stock currently has a fair market value of $12 per share.Which of the following statements regarding Tobey's choices is not true?

In-home office expenses which are not deductible in the year in which the costs were incurred due to income limitations may be carried forward to subsequent years.

Hannah is a 52-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan.Before IRA contributions,her AGI is $66,000 in 2019.What is the maximum amount she may contribute to a tax deductible IRA?

David acquired an automobile for $30,000 for use in his unincorporated business at the beginning of 2019 and used the standard mileage rate method in 2019.He plans to switch to the actual expense method for 2020.The automobile was used 25,000 miles for business purposes in 2019.What is the amount of the adjusted basis of the automobile for purposes of computing depreciation in 2020?

Martin Corporation granted an incentive stock option to employee Caroline on January 1,2013.The option price was $150,and the FMV of the Martin stock was also $150 on the grant date.The option allowed Caroline to purchase 160 shares of Martin stock.Caroline exercised the option on August 1,2017,when the stock's FMV was $250.Unless otherwise stated,assume Caroline is a qualifying employee.If Caroline sells the stock on September 5,2019,for $350 per share,she must recognize (ignore alternative minimum tax)

Carol,a self-employed CPA,purchases hockey tickets online for $180 and takes a client to the game.Immediately before the game,Carol and the client dine on chicken wings and other food and beverages at the restaurant in the arena,and Carol charges the full $120 bill for dinner on her credit card.During dinner,and at various points throughout the game,they discuss an ongoing project Carlos is working on for the client and a potential new project.Carol will deduct

Tanya is considering whether to rollover her traditional IRA to a Roth IRA.Factors important to consider include all of the following except

Which of the following is true about H.R.10 (Keogh)plans?

Which of the following conditions would generally not favor the rollover of an untaxed retirement fund (e.g.,traditional IRA or 401(k)plan)to a Roth account?

Tessa,a self-employed architect,has planned a five-day vacation trip to Miami with her husband.Before leaving,one of Tessa's clients asks her to visit a potential building site while in Miami.Tessa spends one morning evaluating the site and bills the client for the time.Tessa can now deduct the cost of the airfare for the trip.