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

When applying the limitations of the passive activity rules, a taxpayer's AGI is classified into active income, portfolio income and passive income. For this purpose, portfolio income includes dividends, interest, annuities, and royalties.

A nonbusiness bad debt is deductible only in the year in which the debt becomes totally worthless.

Shane, a partner in a law firm, makes the following gifts with their values noted: What amount of the gifts is deductible?

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the

Bonita is the owner of a U.S.- based business with some operations in France. The operations in France generated $200,000 of taxable income which is included in her total taxable income of $2,000,000. Her U.S. tax liability befor is $705,690. Determine the allowable foreign tax credit assuming taxes paid to France as follows: a. $40,000. b. $80,000.

The Pass- Through Model used for S corporations and partnerships is an application of the

Brad and Angie had the following income and deductions during 2018: Calculate Brad and Angie's tax liability due or refund. They file a joint tax return.

Until about 100 years ago, attempts to impose a federal income tax were ruled unconstitutional. The amendment to the U.S. Constitution allowing the imposition of a federal income tax is the

Lucy, a noncorporate taxpayer, experienced the following Sec. 1231 gains and losses during the years 2013 through 2018. Her first disposition of a Sec. 1231 asset occurred in 2013. Assuming Lucy had no capital gains and losses during that time period, what is the tax treatment in each of the years listed?

A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except

Which of the following assets is 1231 property?

Ben is a 30% partner in a partnership. The partnership guarantees Ben payments of $25,000 for the year. If the partnership has ordinary income of $15,000 before adjustment for the guaranteed payment, Ben must report

In a parent- subsidiary controlled group, the common parent corporation must own at least 80% of the stock of each subsidiary corporation in the group.

In order to shift the taxation of dividend income from a parent to a child

A cash- basis taxpayer can defer income recognition by refusing to accept payment.

Tucker (age 52) and Elizabeth (age 48) are a married couple. Tucker is covered under a qualified retirement plan at his job and earned $90,000 in 2018. Elizabeth is employed as a lab technician and earned $30,000 but is not covered under a qualified retirement plan. They file a joint return; have interest and dividend income of $25,000. What is the maximum amount of tax deductible contributions that may be made to a traditional IRA?

Separately stated items are allocated to the S corporation shareholders based on the number of shares of stock owned on the last day of the S corporation's taxable year.

Leo spent $6,600 to construct an entrance ramp and to widen doorways in his personal residence to make the home accessible for his wife, who is disabled and confined to a wheelchair. The $6,600 expenditure increased the value of the residence by $2,000. How much of the $6,600 is a deductible medical expense (before considering limits based on AGI)?

Theo's wife moved overseas in April, and they have not been in touch, although they are still legally married. Theo pays all the costs of the household which includes his 12- year- old son. Because Theo is still married, his only option is to file his tax return as married filing separately.

Gain due to depreciation recapture is included in the netting of Sec. 1231 gains and losses.