Question 1

In community property states, income is generally taxed to the spouse who earned it.

Accepted Answer

A) True 
 B)False

Question 2

A taxpayer conducts a qualifying like- kind exchange. There is no boot involved in the transaction. The basis of the property received will equal the adjusted basis of the property exchanged.

Accepted Answer

A) True 
 B)False

Question 3

Awards for emotional distress attributable to a physical injury are excluded from gross income.

Accepted Answer

A) True 
 B)False

Question 4

A larger work opportunity credit is available for employers who hire any veteran of the U.S. military.

Accepted Answer

A) True 
 B)False

Question 5

To be tax deductible by an accrual- basis taxpayer, an expense must be all of the following except

Accepted Answer

A)  an expense of the taxpayer. 
B)  ordinary and necessary. 
C)  reasonable in amount. 
D)  paid in cash. 
A)  an expense of the taxpayer. 
B)  ordinary and necessary. 
C)  reasonable in amount. 
D)  paid in cash.

Question 6

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,

Accepted Answer

A)  Louisa will be allowed a deduction, but John cannot deduct his moving expenses. 
B)  John will be allowed a deduction, but Louisa cannot deduct her moving expenses. 
C)  both Louisa and John will be allowed a moving expense deduction. 
D)  neither Louisa, nor John, will be allowed a moving expense deduction. 
A)  Louisa will be allowed a deduction, but John cannot deduct his moving expenses. 
B)  John will be allowed a deduction, but Louisa cannot deduct her moving expenses. 
C)  both Louisa and John will be allowed a moving expense deduction. 
D)  neither Louisa, nor John, will be allowed a moving expense deduction.

Question 7

The citation "Reg. Sec. 1.199- 2" refers to

Accepted Answer

A)  a regulation that interprets Code Section 199. 
B)  the second regulation issued in 1999. 
C)  a regulation that can be found on page 199. 
D)  the first regulation issued in 1999. 
A)  a regulation that interprets Code Section 199. 
B)  the second regulation issued in 1999. 
C)  a regulation that can be found on page 199. 
D)  the first regulation issued in 1999.

Question 8

When a partnership interest is sold, ordinary income may result if a partnership has unrealized receivables or inventory items.

Accepted Answer

A) True 
 B)False

Question 9

Expenses related to a hobby are deductible only to the extent of the gross income from the hobby.

Accepted Answer

A) True 
 B)False

Question 10

What are the characteristics of the Pension Model?

Accepted Answer

Before- tax dollars are invested in the

Question 11

Amanda, who lost her modeling job, sued her employer for age discrimination. She was awarded $75,000 in lost wages, $25,000 for emotional distress, and $150,000 punitive damages. The amount taxable is

Accepted Answer

A)  $0. 
B)  $250,000. 
C)  $150,000. 
D)  $225,000. 
A)  $0. 
B)  $250,000. 
C)  $150,000. 
D)  $225,000.

Question 12

John, an employee of a manufacturing company, suffered a heart attack and was unable to work for six months. He received $1,500 per month of disability benefits as a result of an employer- provided group policy. The benefits are includible in John's gross income.

Accepted Answer

A) True 
 B)False

Question 13

The receipt of boot as part of a nontaxable exchange causes a realized loss to be recognized.

Accepted Answer

A) True 
 B)False

Question 14

If a new luxury automobile is used 100% for business and placed in service in 2018, the maximum MACRS depreciation on the vehicle for 2018 is $18,000.

Accepted Answer

A) True 
 B)False

Question 15

Nguyen Corporation, a calendar- year corporation, has a $40,000 current E&P deficit and a $60,000 positive accumulated E&P balance. Also assume that shareholders of the corporation have a total basis in outstanding shares of $35,000. A $75,000 distribution is made to the shareholders on the last day of the year. What is the tax treatment of the $75,000 distribution to the shareholders?

Accepted Answer

The first $20,000 is a taxable dividend

Question 16

A corporation owns many acres of timber, which it acquired three years ago, and which has a $120,000 basis. The timber was cut last year for use in the corporation's business. The FMV of the timber on the first day of last year was $270,000. The corporation made the appropriate election to treat the cutting as a sale or exchange. The timber is sold for $300,000 this year. The tax result this year is

Accepted Answer

A)  recognition of capital gain of $30,000. 
B)  recognition of Sec. 1231 gain of $30,000. 
C)  no income recognized since all recognition occurs in the year of the cutting of the timber. 
D)  recognition of ordinary income of $30,000. 
A)  recognition of capital gain of $30,000. 
B)  recognition of Sec. 1231 gain of $30,000. 
C)  no income recognized since all recognition occurs in the year of the cutting of the timber. 
D)  recognition of ordinary income of $30,000.

Question 17

Maria, a sole proprietor, has several items of office furniture and equipment which are depreciable. All were acquired before this year. She is not required to report her depreciation deduction on Form 4562.

Accepted Answer

A) True 
 B)False

Question 18

Ellie, a CPA, incurred the following deductible education expenses to maintain or improve her skills:   a. If Ellie is self- employed, what are the amount of and the nature of the deduction for these expenses?
b. If, instead, Ellie is an employee who is not reimbursed by her employer, what are the amount of and the nat the deduction for these expenses (after limitations)?

Accepted Answer

a. $1,700 + $6,000 + $800 = $8

Question 19

Pat is a sales representative for a publishing company. He travels extensively as part of his job. During the current year he spends $10,000 on business travel. The company reimburses him $5,000. Before consideration of the travel costs and the reimbursement, Pat earns AGI of $100,000, and he has itemized deductions of $13,000 due to mortgage interest and taxes. Pat is single, with no dependents. What is Pat's taxable income
a. assuming the employer maintains an accountable plan?
b. assuming the employer does not maintain an accountable plan?

Accepted Answer

The answer of Pat is a sales representative for a...

Question 20

Joe is a self- employed tax attorney who frequently entertains his clients at his country club. Joe's club expenses i the following:   Assuming proper documentation is maintained, Joe may deduct

Accepted Answer

A)  $5,300. 
B)  $4,000. 
C)  $2,000. 
D)  $2,600. 
A)  $5,300. 
B)  $4,000. 
C)  $2,000. 
D)  $2,600.

In community property states, income is generally taxed to the spouse who earned it.

A taxpayer conducts a qualifying like- kind exchange. There is no boot involved in the transaction. The basis of the property received will equal the adjusted basis of the property exchanged.

Awards for emotional distress attributable to a physical injury are excluded from gross income.

A larger work opportunity credit is available for employers who hire any veteran of the U.S. military.

To be tax deductible by an accrual- basis taxpayer, an expense must be all of the following except

The citation "Reg. Sec. 1.199- 2" refers to

When a partnership interest is sold, ordinary income may result if a partnership has unrealized receivables or inventory items.

Expenses related to a hobby are deductible only to the extent of the gross income from the hobby.

What are the characteristics of the Pension Model?

Amanda, who lost her modeling job, sued her employer for age discrimination. She was awarded $75,000 in lost wages, $25,000 for emotional distress, and $150,000 punitive damages. The amount taxable is

John, an employee of a manufacturing company, suffered a heart attack and was unable to work for six months. He received $1,500 per month of disability benefits as a result of an employer- provided group policy. The benefits are includible in John's gross income.

The receipt of boot as part of a nontaxable exchange causes a realized loss to be recognized.

If a new luxury automobile is used 100% for business and placed in service in 2018, the maximum MACRS depreciation on the vehicle for 2018 is $18,000.

Maria, a sole proprietor, has several items of office furniture and equipment which are depreciable. All were acquired before this year. She is not required to report her depreciation deduction on Form 4562.

Joe is a self- employed tax attorney who frequently entertains his clients at his country club. Joe's club expenses i the following: Assuming proper documentation is maintained, Joe may deduct

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters

Exam 16: Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

In community property states, income is generally taxed to the spouse who earned it.

A taxpayer conducts a qualifying like- kind exchange. There is no boot involved in the transaction. The basis of the property received will equal the adjusted basis of the property exchanged.

Awards for emotional distress attributable to a physical injury are excluded from gross income.

A larger work opportunity credit is available for employers who hire any veteran of the U.S. military.

To be tax deductible by an accrual- basis taxpayer, an expense must be all of the following except

The citation "Reg. Sec. 1.199- 2" refers to

When a partnership interest is sold, ordinary income may result if a partnership has unrealized receivables or inventory items.

Expenses related to a hobby are deductible only to the extent of the gross income from the hobby.

What are the characteristics of the Pension Model?

Amanda, who lost her modeling job, sued her employer for age discrimination. She was awarded $75,000 in lost wages, $25,000 for emotional distress, and $150,000 punitive damages. The amount taxable is

John, an employee of a manufacturing company, suffered a heart attack and was unable to work for six months. He received $1,500 per month of disability benefits as a result of an employer- provided group policy. The benefits are includible in John's gross income.

The receipt of boot as part of a nontaxable exchange causes a realized loss to be recognized.

If a new luxury automobile is used 100% for business and placed in service in 2018, the maximum MACRS depreciation on the vehicle for 2018 is $18,000.

Maria, a sole proprietor, has several items of office furniture and equipment which are depreciable. All were acquired before this year. She is not required to report her depreciation deduction on Form 4562.

Joe is a self- employed tax attorney who frequently entertains his clients at his country club. Joe's club expenses i the following: Assuming proper documentation is maintained, Joe may deduct

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters