Question 1

Meals and entertainment expenses are limited to 50%.

Accepted Answer

A) True 
 B)False

Question 2

"Listed property" includes only passenger automobiles.

Accepted Answer

A) True 
 B)False

Question 3

Which expenses incurred in a trade or business are deductible?

Accepted Answer

A)  Fines and penalties. 
B)  Supplies expenses. 
C)  Political lobbying expenses. 
D)  Bribes. 
A)  Fines and penalties. 
B)  Supplies expenses. 
C)  Political lobbying expenses. 
D)  Bribes.

Question 4

Taxpayers must use the mid-month convention when more than 40% of the personal property is placed in service during the last three months of the tax year.

Accepted Answer

A) True 
 B)False

Question 5

In June 2014,Kelly purchased new equipment for $26,000 to be used in her business.Assuming Kelly has net income from her business of $75,000 prior to the deduction,what is the maximum amount of cost recovery Kelly can deduct rounded to the nearest dollar,assuming she does not elect §179 expense or bonus depreciation?

Accepted Answer

A)  $3,715. 
B)  $13,000. 
C)  $14,858. 
D)  $26,000. 
A)  $3,715. 
B)  $13,000. 
C)  $14,858. 
D)  $26,000.

Question 6

Byron took a business trip from Philadelphia to Rome.He was away 16 days of which he spent 9 days on business (including two travel days)and 7 days vacationing.His expenses are as follows:   Byron's total travel (including meals and lodging)expense deduction rounded to the nearest dollar is:

Accepted Answer

A)  $2,396. 
B)  $2,878. 
C)  $3,395. 
D)  $5,180. 
A)  $2,396. 
B)  $2,878. 
C)  $3,395. 
D)  $5,180.

Question 7

The §179 expense deduction is limited to earned income.

Accepted Answer

A) True 
 B)False

Question 8

Chris runs a business out of her home.She uses 500 square feet of her home exclusively for the business.Her home is 2500 square feet in total.Chris had $36,000 of business revenue and $32,000 of business expenses from her home business.The following expenses relate to her home:   What is Chris' net income from her business and the amount of expenses carried over to the following year,if any?

Accepted Answer

A)  Option a 
B)  Option b 
C)  Option c 
D)  Option d 
A)  Option a 
B)  Option b 
C)  Option c 
D)  Option d

Question 9

Education expenses are deductible if the education maintains or improves existing skills or if the education helps the taxpayer qualify for a new trade or business.

Accepted Answer

A) True 
 B)False

Question 10

The luxury auto limits on depreciation must be reduced if business use is less than 100%.

Accepted Answer

A) True 
 B)False

Question 11

When business property is lost in a fire,storm,shipwreck,theft,or other casualty,the taxpayer normally receives a capital loss deduction.

Accepted Answer

A) True 
 B)False

Question 12

Ted purchased a vehicle for business and personal use.In 2014,Ted used the vehicle 70% for business (10,000 business miles)and used the standard mileage rate to calculate his vehicle expenses.Ted also paid $1,200 in interest and $380 in county property tax on the car.What is the total business deduction related to business use of the car in 2014?

Accepted Answer

The total business deduction related to

Question 13

In order for an employee to deduct home office expenses,which of the following must occur?

Accepted Answer

A)  The business use of the home must be specifically for trade or business purposes. 
B)  There must be no other fixed business location. 
C)  The taxpayer's most important activities must occur in the home. 
D)  The home office must be for the convenience of his or her employer. 
A)  The business use of the home must be specifically for trade or business purposes. 
B)  There must be no other fixed business location. 
C)  The taxpayer's most important activities must occur in the home. 
D)  The home office must be for the convenience of his or her employer.

Question 14

Depreciation is allowed for every tangible asset (except land)used either in a trade or business or for the production of income.

Accepted Answer

A) True 
 B)False

Question 15

The adjusted basis of an asset is:

Accepted Answer

A)  The cost basis less any accumulated depreciation. 
B)  The cost of the asset. 
C)  The fair market value of the asset. 
D)  The trade-in value of the asset. 
A)  The cost basis less any accumulated depreciation. 
B)  The cost of the asset. 
C)  The fair market value of the asset. 
D)  The trade-in value of the asset.

Question 16

During 2014,Regina,a sole proprietor,had the following income and expenses from her home jewelry business.Regina is also employed as an office assistant at a local business:

Accepted Answer

@#IMG-DLM& a.What income or loss should be reporte

Question 17

Under MACRS,5-year property includes:

Accepted Answer

A)  Warehouse. 
B)  Apartment complex. 
C)  Automobiles and light trucks used in a trade or business. 
D)  Fruit-bearing trees. 
A)  Warehouse. 
B)  Apartment complex. 
C)  Automobiles and light trucks used in a trade or business. 
D)  Fruit-bearing trees.

Question 18

§179 expense is available for all of the following business assets except:

Accepted Answer

A)  Bulldozer. 
B)  Phone system. 
C)  Apartment complex. 
D)  Office furniture. 
A)  Bulldozer. 
B)  Phone system. 
C)  Apartment complex. 
D)  Office furniture.

Question 19

Which of the following is not a "trade or business" expense?

Accepted Answer

A)  Mortgage interest on a warehouse. 
B)  Depreciation on business equipment. 
C)  Mortgage interest on a personal residence. 
D)  Cost of goods sold. 
A)  Mortgage interest on a warehouse. 
B)  Depreciation on business equipment. 
C)  Mortgage interest on a personal residence. 
D)  Cost of goods sold.

Question 20

Bart has the following income and expenses for his Schedule C:

Accepted Answer

@#IMG-DLM& What is B

Meals and entertainment expenses are limited to 50%.

"Listed property" includes only passenger automobiles.

Which expenses incurred in a trade or business are deductible?

Taxpayers must use the mid-month convention when more than 40% of the personal property is placed in service during the last three months of the tax year.

Byron took a business trip from Philadelphia to Rome.He was away 16 days of which he spent 9 days on business (including two travel days)and 7 days vacationing.His expenses are as follows: Byron's total travel (including meals and lodging)expense deduction rounded to the nearest dollar is:

The §179 expense deduction is limited to earned income.

Education expenses are deductible if the education maintains or improves existing skills or if the education helps the taxpayer qualify for a new trade or business.

The luxury auto limits on depreciation must be reduced if business use is less than 100%.

When business property is lost in a fire,storm,shipwreck,theft,or other casualty,the taxpayer normally receives a capital loss deduction.

In order for an employee to deduct home office expenses,which of the following must occur?

Depreciation is allowed for every tangible asset (except land)used either in a trade or business or for the production of income.

The adjusted basis of an asset is:

During 2014,Regina,a sole proprietor,had the following income and expenses from her home jewelry business.Regina is also employed as an office assistant at a local business:

Under MACRS,5-year property includes:

§179 expense is available for all of the following business assets except:

Which of the following is not a "trade or business" expense?

Bart has the following income and expenses for his Schedule C:

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 6: Self-Employed Business Income

Meals and entertainment expenses are limited to 50%.

"Listed property" includes only passenger automobiles.

Which expenses incurred in a trade or business are deductible?

Taxpayers must use the mid-month convention when more than 40% of the personal property is placed in service during the last three months of the tax year.

Byron took a business trip from Philadelphia to Rome.He was away 16 days of which he spent 9 days on business (including two travel days)and 7 days vacationing.His expenses are as follows: Byron's total travel (including meals and lodging)expense deduction rounded to the nearest dollar is:

The §179 expense deduction is limited to earned income.

Education expenses are deductible if the education maintains or improves existing skills or if the education helps the taxpayer qualify for a new trade or business.

The luxury auto limits on depreciation must be reduced if business use is less than 100%.

When business property is lost in a fire,storm,shipwreck,theft,or other casualty,the taxpayer normally receives a capital loss deduction.

In order for an employee to deduct home office expenses,which of the following must occur?

Depreciation is allowed for every tangible asset (except land)used either in a trade or business or for the production of income.

The adjusted basis of an asset is:

During 2014,Regina,a sole proprietor,had the following income and expenses from her home jewelry business.Regina is also employed as an office assistant at a local business:

Under MACRS,5-year property includes:

§179 expense is available for all of the following business assets except:

Which of the following is not a "trade or business" expense?

Bart has the following income and expenses for his Schedule C:

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters