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

The basis of a partner's interest in a partnership is adjusted to reflect each partner's share of income and deduction items only if a distribution is made to the partners.

Under the economist's definition, unrealized gains, as well as gifts and inheritances, are income.

Amounts collected under accident and health insurance policies purchased by the taxpayer are excludible from income.

Tarik, a single taxpayer, has AGI of $55,000 which includes $1,000 of qualified dividends. Tarik does not of itemize deductions. What is his 2018 federal income tax?

Matt paid the following taxes this year: What is the maximum amount Matt can deduct as an itemized deduction on his tax return?

Under both the accounting and tax law concepts of income, income must be "realized."

Distinguish between the Corn Products doctrine and the ruling in the Arkansas Best Corporation case.

Daniel transfers land with a $92,000 adjusted basis and a $100,000 FMV to a corporation in a Sec. 351 transfer. Immediately after the transfer, Daniel owns 100% of the corporation- stock with a FMV of $15,000. In addition, $85,000 of business- related liabilities are assumed by the corporation with respect to the transfer. No other property is transferred. Daniel's basis in the stock is

Ron and Eve are a married couple who plan to file separate tax returns. How will they determine how to split their income for tax reporting purposes?

For the years 2014 through 2018 (inclusive) Mary, a best- selling author, has been involved in operating an antique store. In 2014, 2015 and 2016 her revenue exceeded the expenses from the activity. In 2017 and 2018, the antique store generated a loss. Which statement is correct?

Under the cash method of accounting, income is reported for the tax year in which payments are actually or constructively received.

What is required for an individual to be considered as actively participating in a real estate activity for purposes of utilizing the $25,000 ceiling on rental real estate losses?

Angie starts a new job on July 1 and becomes covered under the employer's health insurance plan which has an annual deductible of $2,400. Angie contributes the maximum amount into a Health Savings Account. Which of the following statements regarding Angie's Health Savings Account is correct?

Which of the following is not included in gross income when received?

All of the following items are excluded from gross income except

During the current year, Lucy, who has a sole proprietorship, pays legal and accounting fees for the following: What amount is deductible for AGI?

The tax law encompasses administrative and judicial interpretations, such as Treasury regulations, revenue rulings, revenue procedures, and court decisions, as well as statutes.

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

When the taxpayer anticipates a full recovery on a casualty loss of business property but receives less than full recovery in a subsequent year, the unrecovered portion may be deducted.

Lars has a basis in his partnership interest in XXL of $100,000. He sells the partnership interest in XXL for $160,000. XXL is a cash- basis partnership which has accounts receivable with a $30,000 fair market value and a zero adjusted basis. Lars's share of these receivables is $10,000. What is the amount and character of the gain that Lars recognizes on the sale of his partnership interest?