Exam 23: Business Expenses and Deferred Compensation

Charishma,a CPA,paid the following expenses in pursuing her profession: -Professional society dues -$450 -Tax and accounting journals -$250 How much of these expenses can be deducted if she is an employee of an accounting firm,and how much is deductible is she is a self-employed CPA? Ignore any potential limitations based on AGI.

Jason,who lives in New Jersey,owns several apartment buildings in Baltimore.His travel expenses to Baltimore to inspect his property are tax deductible.

An individual taxpayer incurs expenses connected with her work as an independent contractor and her rental real estate activities.Assuming all the expenses are ordinary,necessary and reasonable,they will be deductible

Louisa,an active duty U.S.Air Force pilot,receives orders to transfer from the Fort Benning (Georgia)base to the Fort Hood (Texas)base.It is a permanent transfer.John is a civilian employee of the U.S.Navy.He is transferred by the Navy from Norfolk (Virginia)to San Diego (California).Both individuals pay their own moving expenses.Regarding their ability to deduct the moving expenses

A sole proprietor will not be allowed to deduct current home office expenses to the extent that they create or increase a loss from her business.

Taxpayers may use the standard mileage rate method when five vehicles are used simultaneously for business.

A company maintains a qualified pension plan for all of its employees.The company can also establish a qualified profit-sharing plan for its management team.

Gayle,a doctor with significant investments in the stock market,traveled on a cruise ship to Bermuda.Investment specialists provided daily seminars which Gayle attended.The cost of the cruise for four days is $2,500.Gayle can deduct (before application of any floors)

According to the IRS,a person's tax home is the location of the family residence regardless of the location of the taxpayer's principal place of work.

All of the following may deduct education expenses except

Lokesh,a self-employed taxpayer,recently returned from a business conference out of town.Unfortunately,due to a malware attack on his system,he has lost his hotel and meal receipts.Due to the lack of receipts,Lokesh will not be able to deduct his hotel and meals.

Which of the following statements regarding Coverdell Education Savings Accounts is incorrect,disregarding any AGI limits?

Entertainment expense (i.e.,the hockey tickets)is not deductible.If food and beverages are consumed before,during,or after an entertainment event,the cost of the meals must be separately paid for or separated from the cost of the entertainment.In this case,the food and beverages are not separately stated from the entertainment cost.An employee travels out of town as required by his job,and he is not reimbursed.The employee can deduct these work-related travel costs.

In a contributory defined contribution pension plan,all of the following are true with the exception of

Generally,50% of the cost of business gifts is deductible up to $25 per donee per year for self-employed individuals.

Avantra Inc.is a professional firm with the professional employee group generally in the top tax bracket and the support staff generally in the 12% tax bracket.Due to rising costs and administrative burden,the company is considering discontinuing its dental and eye care insurance plan and instead giving all employees a $600 raise.Based on insurance records the average employee incurs about $400 of dental and eye care expense per year.Which of the following statements is correct?

Shane,a self-employed junior partner in a law firm,makes the following gifts with their values noted: Managing partner in Shane's firm \ 30 Shane's personal assistant 40 4 clients (\ 27 each) 108 What amount of the gifts is deductible?

The maximum tax deductible contribution to a Roth IRA in 2019 is $6,000 ($7,000 for a taxpayer age 50 or over).

A self-employed taxpayer is considered to be in travel status for temporary work assignments of two years or less.

Which of the following statements is correct regarding limitations on employer's contributions to qualified retirement plans in 2019?