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

Yusef, age 15, is a dependent of his parents. In 2018 he earned $5,000 from a part- time job and $8,000 of interest income on bonds given him by his grandparents, resulting in taxable income of $7,650. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and earned taxable income. Yusef's taxable income will be divided as follows:

A taxpayer at risk for AMT should consider which of the following decisions?

For non- cash charitable donations, an appraisal will be required for donations valued at more than

Which of the following documents is issued by the IRS to a specific taxpayer?

Mitzi's 2018 medical expenses include the following: Mitzi's AGI for the year is $33,000. She is single and age 49. None of the medical costs are reimbursed by insuran considering the AGI floor, Mitzi's medical expense deduction is

The following information is available for Bob and Brenda Horton, a married couple filing a joint return, for 2018 Bob and Brenda are age 32 and have no dependents. a. What is the amount of their gross income? b. What is the amount of their adjusted gross income? c. What is the amount of their taxable income? d. What is the amount of their tax liability (gross tax), rounded to the nearest dollar? e. What is the amount of their tax due or (refund due)?

Form 6251, Alternative Minimum Tax, must be filed in any of the following situations except

Determine the net deductible casualty loss on Schedule A for Alan Michael when his adjusted gross income was in 2018 and the following occurred: All casualty losses were nonbusiness personal- use property loss and occurred in a federally declared disaster ar What is the amount of the net deductible casualty loss?

John, who is President and CEO of ZZZ Corporation which owns the ZZZ hotel chain, is working with his Human Resources department to design an employee fringe benefits package. He would like employees to receive discounts on goods and services provided by the corporation, would like to provide free hotel rooms to employees, would like to provide transit passes or pay for parking in metropolitan areas, and would like to provide recreational and athletic facilities. What issues should John consider in designing his package?

An LLC that elects to be taxed like a partnership is also classified as a partnership for legal purposes.

A $10,000 gain earned on stock held 13 months is taxed in a more favorable manner than a $10,000 gain earned on stock held 11 months.

Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.

Trisha is married and has young children. The couple is in the 37% tax bracket. In order for Trisha and her husband to work, they pay $5,000 for daycare which earns them a $1,000 dependent care credit. Trisha has been offered a new job. The new job will pay a $5,000 lower salary, but the new employer will offer $5,000 of paid child care. Trisha cannot claim the dependent care credit if she receives employer- paid child care. Which of the following statements is correct? (Ignore payroll taxes.)

When given a choice between making a contribution to a Roth IRA or to a nondeductible traditional IRA, the taxpayer should choose the Roth IRA.

Property transferred to the decedent's spouse is exempt from the estate tax because of the estate tax marital deduction provision.