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

When the House and Senate versions of a tax bill are not in agreement, the disagreements are resolved by the

Amounts withdrawn from qualified tuition plans are tax- free if the amounts are used for qualified higher education expenses including tuition, fees, books, and room and board for students attending on at least a half- time basis.

The partnership's assumption of a liability from a partner is treated as a cash distribution to the partner whose liability is assumed, which decreases his basis in the partnership.

A tenant in an office building makes improvements to the office space that are qualified improvement property (QIP). The QIP will be depreciated over the remaining MACRS life of the building.

The corporate built- in gains tax does not apply to a corporation that has always been taxed as an S corporation.

Ava has net earnings from self- employment of $125,000. She also earned salary of $170,000 from a job held earlier in the year. How much Additional Medicare Tax will be owed on the self- employment income?

Stock purchased on December 15, 2017, which becomes worthless in March 2018, produces a STCL since the holding period is one year or less.

The sale of inventory at a loss results in an ordinary loss.

Jason, who lives in New Jersey, owns several apartment buildings in Baltimore. His travel expenses to Baltimore to inspect his property are tax deductible.

Taxpayers may not deduct interest expense on most personal debt, including credit card debt, car loans, and other consumer debt.

The general business credit includes all of the following with the exception of

When capital or Sec. 1231 assets are transferred to a partnership in exchange for a partnership interest qualifying under Sec. 721, the holding period for the partnership interest includes the holding period of the contributed property.

In the Exempt Model, the earnings are excluded from explicit taxation.

Suzanne, a single taxpayer, has the following tax information for the current year. • Charitable contribution of real property with a FMV of $25,000 (adjusted basis $20,000) for which a $25,000 d was taken for regular tax. • Research and experimental expenses of $40,000 deducted in full for regular tax. Suzanne's total tax preferences and adjustments equals

Discuss reasons why a married couple may choose not to file a joint return.

Leigh pays the following legal and accounting fees during the year: What is the total amount of her for AGI deduction for these fees?

An accrual of a reserve for bad debt expense by an accrual- basis taxpayer meets the standards of all- events and economic performance.

On January 1 of this year, Brad purchased 100 shares of stock at $4,000. By December 31 of this year, the stock had declined in value to $2,200, but Brad still held the shares. Brad has realized a $1,800 loss for tax purposes this year.

All of the following are true of losses from the sale or worthlessness of small business corporation (Section 1244) stock with the exception of

In 2018 the IRS audits a company's 2016 tax return and determines that the president's salary was excessive and disallowed $100,000 of the salary deduction. Under the terms of the hedge (payback) agreement in the corporate bylaws, the president repays $100,000 of her salary to her employer in 2018. The president will amend her 2016 tax return to get a refund of the taxes paid on the excess salary.