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

In order to simplify recordkeeping, a self- employer taxpayer elects to use the federal per diem rate for business travel expenses. This election eliminates the requirement of maintaining documentation of time, place and business purpose of the travel.

The discharge of certain student loans is excluded from income if all of the following are present except for

Jason sells stock with an adjusted basis of $66,000 to JJ Inc., his 60% owned corporation, for its fair market value of $60,000. JJ Inc. sells the stock three years later for $67,000. JJ Inc.'s recognized gain or loss on the sale will be

The amount of loss realized on the sale of property is computed by subtracting adjusted basis from amount realized.

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year, all of the following are generally true with the exception of

If the business usage of listed property is less than or equal to 50% of its total usage, depreciation is calculated using the

If a taxpayer's AGI is greater than $150,000, no penalty will be imposed if the taxpayer pays estimated tax payments in 2018 equal to what percentage of 2017's income tax liability?

On September 2, of this year, Keshawn sold land to Rex, his nephew, for $400,000. Keshawn's basis in the land was $100,000. Rex agreed to pay his uncle $40,000 this year, and $60,000 each year for the next six years plus interest. One month later, Rex sold the land to Theo, an unrelated party, for $450,000. Based on this information, Keshawn must report

The exclusion for employee discounts on services is limited to 30% of the price charged regular customers.

Gregory receives 100 shares of stock from his employer as a year- end bonus. The fair market value of the stock should be included in Gregory's income for the year.

According to the IRS, a person's tax home is the location of the family residence regardless of the location of the taxpayer's principal place of work.

A new corporation is formed on January 2, 2018. In order to have the S election effective as of the first day of the first tax year, the Form 2553 must be filed no later than

In which of the following situations is the individual more likely to be classified as an independent contractor rather than an employee?

Priya is a partner in a partnership. The partnership has incurred a loss for the year. Priya's ability to recognize the loss will be tested in the following order:

Pam, a single taxpayer, owns a building used in her trade or business that was placed into service in 2004. The b cost $450,000 and depreciation to date amounts to $200,000. Pam sells the building in 2018 for $380,000. It is the o she sells this year, and she has no nonrecaptured Sec. 1231 losses. a. What is the amount of recognized gain and the nature of the gain? b. Assume that Pam's taxable income before consideration of the building gain is $550,000. How will the gain b c. Assume that Pam's taxable income before consideration of the building gain is $100,000. How will the gain b

Which of the following is not excluded from income?

Manatee Corporation, a retailer, is owned equally by twelve unrelated individuals. Its taxable income this year is $100,000 and its regular federal income tax liability is $21,000. The company claims a $20,000 dividends- received deduction and pays $25,000 dividends to its shareholders. The corporation had accumulated earnings and profits of $200,000 at the end of the preceding year. The company has reasonable needs of the business at year- end of $210,000. The accumulated earnings tax is

Juan has a casualty loss of $32,500 on investment property after receiving an insurance settlement. This is Juan's only casualty transaction this year. Juan's loss is

A qualifying child of the taxpayer must meet the gross income test.

Rolf exchanges an office building worth $150,000 for investment land worth $175,000. He also provided stock worth $25,000. Rolf's adjusted basis in the building and stock is $130,000 and $11,000, respectively. How much gain will Rolf recognize on the exchange?