Exam 25: Employee Expenses and Deferred Compensation

In-home office expenses are deductible if the office is used exclusively on a regular basis as the principal place of business for any trade or business of the taxpayer.

Taxpayers may use the standard mileage rate method when five vehicles are used simultaneously for business.

Gina is an instructor at State University in Birmingham.Her university has asked her if she would be interested in taking a temporary assignment at their Montgomery campus.In addition to her salary,the University would pay her living expenses while in Montgomery.What should Gina consider with regard to taxes in deciding whether or not to accept the offer?

Bill obtained a new job in Boston.He incurred the following moving expenses: Assuming Bill is entitled to deduct moving expenses,what is the amount of the deduction?

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2013.The option price was $150,and the FMV of the Martin stock was also $150 on the grant date.The option allowed Caroline to purchase 1,000 shares of Martin stock.The option itself does not have a readily ascertainable FMV.Caroline exercised the option on August 1,2017,when the stock's FMV was $250.Caroline sells the stock on September 5,2018,for $300 per share.Martin Corporation will be allowed a deduction of

In addition to the general requirements for in-home office expenses,employees must also prove that the exclusive use of the office is for the convenience of the employer.

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

Chuck,who is self-employed,is scheduled to fly from Minneapolis to London on a business trip.His flight schedule included a connection through New York City.When Chuck arrived in New York City,he learned that his flight to London had been cancelled due to a volcanic eruption in Iceland.All air travel to Europe was delayed for five days because of significant amounts of ash in the air,causing Chuck to incur costs for hotel and meals in New York City.Since Chuck had never been to New York City before,he spent the time sightseeing.What tax issues are present?

Dues paid to social or athletic clubs are deductible if they meet a primary-use test,requiring that more than 50% of the use of the facility be for business purposes.

Rita,a single employee with AGI of $100,000 before consideration of the items below,incurred the following expenses during the year,all of which were unreimbursed unless otherwise indicated: In addition,Rita paid $300 for dues to her professional business association.The company reimbursed her after she submitted the appropriate documentation for the dues.What is Rita's net miscellaneous itemized deduction for the year after application of all relevant limitations?

Which of the following is true about future qualified distributions from a Roth IRA by a person who will be 65 years old at the time the distributions begin? Assume the individual opened the account before age 60.

Tobey receives 1,000 shares of YouDog! stock as part of his compensation package.Tobey's employment contract with YouDog!,Inc. ,states that if he leaves before completion of three years of employment,he will forfeit the stock.The stock currently has a fair market value of $12 per share.Which of the following statements regarding Tobey's choices is not true?

During 2017,Marcia,who is single and is covered under a pension plan at work,contributes $5,500 into a Roth IRA.If her AGI is $66,000,which of the following is true?

Tucker (age 52)and Elizabeth (age 48)are a married couple.Tucker is covered under a qualified retirement plan at his job and earned $90,000 in 2017.Elizabeth is employed as a lab technician and earned $30,000 but is not covered under a qualified retirement plan.They file a joint return; have interest and dividend income of $25,000.What is the maximum amount of tax deductible contributions that may be made to a traditional IRA?

Discuss the tax treatment of a nonqualified stock option plan.

Under a qualified pension plan,the employer's deduction is usually deferred until the employee recognizes income.

Matt is a sales representative for a local company.He entertains customers as part of his job.During the current year he spends $3,000 on business entertainment.The company provides him an expense allowance of $2,000 under a nonaccountable plan.How will Matt treat the $2,000 partial reimbursement and the $3,000 entertainment expense?

Commuting to and from a job location is a deductible expense.

Which of the following statements regarding Coverdell Education Savings Accounts is incorrect,disregarding any AGI limits?

Sam retired last year and will receive annuity payments for life from his employer's qualified retirement plan of $30,000 per year starting this year.During his years of employment,Sam contributed $130,000 to the plan on an after-tax basis.Based on IRS tables,his life expectancy is 260 months.This year,Sam will include what amount in income?