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

Rita, a self- employed CPA, incurred the following expenses during the year: What is Rita's deduction for the year with respect to the above expenses and where will she deduct these expens her tax return? Assume Rita maintains all appropriate documentation.

Discuss the requirements for meals provided by employers to be excluded from their employees' income. How is the de minimis rule distinguished from these requirements?

C corporations will calculate income tax

A citator is used to find

Wayne and Maria purchase a home on April 1 of the current year. In order to obtain a thirty- year mortgage, they are required to pay $7,200 in points at closing. Charging points is a customary business practice in the area. In addition, they pay $4,400 of interest during the year. What is their current year deduction related to their home?

Shelley owns a 25% interest in a qualifying S corporation. Shelley's basis in the stock was $15,000 at the beginnin year. Shelley made no capital contributions and received no distributions during the year. Shelley loaned the S corporation $20,000 this year. The S corporation incurred a $160,000 ordinary loss this year. a. What are the amounts of Shelley's deduction and carryover of the unused loss for the year? b. What is the amount of Shelley's basis in the stock at the end of year one? c. If the S Corporation earned net income of $200,000 in year two, what is the amount of Shelley's stock basis at end of year two?

Brittany receives a nonliquidating distribution of $48,000 cash from her partnership. Brittany's basis in her partnership interest prior to the distribution is $25,000. What are the tax consequences of the distribution?

In a contributory defined contribution pension plan, all of the following are true with the exception of

When a court discusses issues not raised by the facts, the comments

Troy incurs the following expenses in his business, an illegal gambling establishment: His deductible expenses are

Mortgage interest paid on a mortgage obtained to buy a principal residence, deductible for regular income tax purposes, is also an allowable deduction for AMT.

Discuss the differences and similarities between regular and memorandum decisions issued by the U.S. Tax Court.

On April 12, 2017, Suzanne bought a computer for $20,000 for business use. This was the only purchase for that year. Suzanne used the most accelerated depreciation method available but did not elect Sec. 179. Bonus depreciation was not available. Suzanne sells the machine in 2018. The depreciation on the computer for 2018 is

Which regulation deals with Code Section 165?

Cal and Ann are a married couple filing a joint return. Ann earns a $700,000 salary as a bank executive. The couple has $150,000 of interest and dividend income. Cal is a 50% partner and material participant in CD Partnership. CD has incurred a $1.5 million ordinary loss this year, and Cal's share is $750,000. Cal's basis is large enough to absorb the loss. With respect to the partnership loss, the couple will deduct

Distributions in excess of a corporation's current and accumulated earnings and profits are treated as a nontaxable recovery of capital unless they exceed the basis of the stock.

A family- owned corporation with substantial investment income could be subject to both the accumulated earnings tax and the personal holding company tax.

Paul makes the following property transfers in the current year: • $22,000 cash to his wife • $34,000 cash to a qualified charity • $220,000 house to his son • $3,000 computer to an unrelated friend The total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified tra is

If each party in a like- kind exchange assumes a liability of the other party, only the net liability given or received is boot.

Which of the following is a true statement regarding primary authority of tax law?