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

A check received after banking hours is considered constructively received by the payee even though the check cannot be converted to cash.

While payments received because a person has been physically injured are excluded from gross income, payments on account of non- physical injury must be included in gross income.

Van pays the following medical expenses this year: • $1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse. • $300 for Van's eyeglasses. • $900 for Van's dental work. • $3,800 for Van's face lift. Van, a newscaster, is worried about the wrinkles around his eyes. How much can Van include on his return as qualified medical expenses before limitation?

Which of the following characteristics belong(s) to the Exempt Model?

During 2017, Christiana's employer withheld $1,500 from her wages for state income taxes. She claimed the $1,500 as an itemized deduction on her 2017 federal income tax return which included $9,000 of itemized deductions (the 2017 standard deduction was $6,350). Christiana is single. On her 2017 state income tax return, her state income tax was $900. As a result, Christiana received a $600 refund in 2018. What amount must Christiana include in income in 2018?

Explain what types of tax planning are available for taxpayers making charitable contributions.

The nonrefundable disabled access credit is available to eligible small businesses for expenditures incurred to make existing business facilities accessible to disabled individuals.

A proportional tax rate is one where the rate of the tax is the same for all taxpayers, regardless of income levels.

Points paid on a mortgage to buy a personal residence are deductible in the year paid.

Gain recognized on the sale or exchange of property between related parties is capital if the property is subject to depreciation in the hands of the transferee.

To qualify as an abandoned spouse, the taxpayer is not required to

The taxable portion of a gain from qualified small business stock is taxed at a top tax rate of

The key distinguishing factor for classifying a worker as either an employee or self- employed includes the right to control and direct the worker with respect to both the end result and the means to accomplish that end result.

Jacob, who is single, paid educational expenses of $16,000 in 2018. He redeemed Series EE bonds and received principal of $8,000 and interest of $3,000. Jacob has other adjusted gross income of $83,550. The $3,000 exclusion must be reduced by

Doug pays a county personal property tax on his automobile of $1,500. The $1,500 includes $800 based on the weight of the car and $700 based on the value of the car. How much of the tax can Doug deduct on his tax return?

The following gains and losses pertain to Arnold's business assets that qualify as Sec. 1231 property. Arnold doe have any nonrecaptured net Sec. 1231 losses from previous years, and the portion of gain recaptured as ordinary due to the depreciation recapture provisions has been eliminated. Describe the specific tax treatment of each of these transactions.

Heidi invests $1,000 in a taxable bond for 5 years that earns 4% interest per year. Her marginal tax rate is 15%. What is her after- tax accumulated investment at the end of year 5 (assume that bond interest is reinvested at the same rate)?

The expenses associated with promoting and marketing partnership interests can be currently deducted if

Harley, a single individual, provided you with the following information for this year: Income: Deductions: What is the amount of Harley's net operating loss for this year?

During the current year, Deborah Baronne, a single individual, paid the following amounts: How much can Deborah deduct in taxes as itemized deductions?