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

If an employee incurs travel expenditures and is fully reimbursed by the employer, neither the reimbursement nor the deduction is reported on the employee's tax return if reporting is pursuant to an accountable plan.

In the case of married taxpayers, an individual may claim the Sec. 121 exclusion even if the individual's spouse used the exclusion within the past two years.

The tax law encourages certain forms of fringe benefits by allowing employees to deduct the value of the benefit from gross income and allowing employers to exclude the cost.

In community property states, income from separate property owned before marriage is always considered separate income after marriage.

For a bad debt to be deductible, the taxpayer must have a basis in the debt.

Which of the following statements regarding Sec. 179 is true?

What is or are the standards that must be present to warrant a casualty loss deduction?

Discuss what circumstances must be met for personal property taxes to be deductible.

Identify which of the following statements is true.

Caleb's 2018 medical expenses before reimbursement for the year include the following: Caleb's AGI for the year is $50,000. He is single and age 58. Caleb also receives a reimbursement for medical exp $1,000. Caleb's deductible medical expenses that will be added to the other itemized deduction will be

All of the following statements regarding Sec. 1245 are true except

Rex has the following AMT adjustment factors: - Depreciation of real property acquired in 1996 using MACRS is $22,000 while depreciation for AMT purposes is $15,000. - R&E expenditures amounting to $60,000 are expensed. The net adjustment is

Carla redeemed EE bonds which qualify for the educational exclusion. The redemption consisted of $14,000 principal and $6,000 interest. The net qualifying educational expenses are $10,000. Her AGI is below the threshold for phase- out of the exclusion. The taxable interest is

Myriah earns salary of $80,000 and $20,000 of dividend income from her stock portfolio this year. Myriah owns a passive activity from which she incurs a $10,000 loss. In addition, the passive activity has generated tax credits this year, and Myriah's share is $5,000. What portion of the $5,000 of tax credits can Myriah apply against her tax liability this year?

The term "gross income" means the total of all income from any source, but after reduction for exclusions.

Julia, age 57, purchases an annuity for $33,600. Julia will receive $400 per month for the rest of her life. The expected return multiple is 20.0. At age 88, the amount that Julia may exclude from income is

On June 1, 2018, Ellen turned 65. Ellen has been a widow for five years and has no dependents. Her standard deduction is

Which of the following serves as the highest authority for tax research, planning, and compliance activities?

Social Security benefits are excluded from taxation for all taxpayers.

Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV) of stock owned by Hayden. Hayden takes the land subject to the liability. Jack incurs $500 of selling expenses. What is the amount of Jack's realized gain on the exchange?