Exam 9: Deductions Employee and Self Employed Related Expenses

After completing an overseas assignment in Oslo (Norway),Daniel retires from Pelican Corporation and moves to a retirement community in Key West (Florida).Daniel's moving expenses from Oslo to Key West are deductible as they are exempt from the time test.

Ramon and Ingrid work in the field of public relations and incur sizable entertainment expenses.Ramon is employed by a consumer products company,while Ingrid is a self-employed consultant.Regarding the tax treatment of the entertainment expenses,when would: a.Ramon be better off than Ingrid? b.Ingrid be better off than Ramon?

On their birthdays,Lily sends gift certificates (each valued at $25)to Caden (a key client)and to each of Caden's two minor children.Lily can deduct only $25 as to these gifts.

Faith just graduated from college and she needs advice on the tax treatment of the costs she incurs in connection with her first job (a sales person for a pharmaceutical company).Specifically,she wants to know about the following items: a.Job search costs. b.Business wardrobe cost. c.Moving expenses. d.Deduction for office in the home.

Felicia,a recent college graduate,is employed as an accountant by an oil company.She would like to continue her education and obtain a law degree.Discuss Felicia's tax status if she attends a local law school on a: a.Part-time basis. b.Full-time basis.

The Federal per diem rates that can be used for "deemed substantiated" purposes are the same for all locations in the country.

A taxpayer who maintains an office in the home to conduct his only business will not have nondeductible commuting expense.

Ethan,a bachelor with no immediate family,uses the Pine Shadows Country Club exclusively for his business entertaining.All of Ethan's annual dues for his club membership are deductible.

Dave is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City.When the company opens new stores in Boise,Dave is given the task of supervising their initial operation.For three months,he works weekdays in Boise and returns home on weekends.He spends $350 returning to Salt Lake City but would have spent $410 had he stayed in Boise for the weekend.As to the weekend trips,how much,if any,qualifies as a deduction?

For tax year 2015,Taylor used the simplified method of determining her office in the home deduction.For 2016,Taylor must continue to use the simplified method and cannot switch to the regular (actual expense)method.

Ralph made the following business gifts during the year. To Robert (a key client)at Christmas $50 To Angel (Robert's 8-year old daughter)on her birthday 20 To Art (Ralph's secretary)on his birthday ($3 was for gift wrapping) 30 To Paige (Ralph's boss)at Christmas 40 ​ Presuming proper substantiation,Ralph's deduction is:

As to meeting the time test for purposes of deducting moving expenses,which of the following statements is correct?

Rachel is single and has a college degree in finance.She is employed as a loan officer at a bank;her yearly AGI approximates $50,000.During the year,she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $4,100 (tuition),$300 (books),$200 (other school supplies),and $200 (transportation to and from campus).Disregarding the 2%-of-AGI limitation,as to the MBA program,Rachel has a:

In connection with the office in the home deduction,comment on the following: a.Mixed use (i.e. ,business and personal)of the portion of the home allocated to business. b.The difference between direct and indirect expenses for deduction purposes. c.The classification of the expense (i.e. ,dfor or dfrom AGI).

Aiden performs services for Lucas.Which,if any,of the following factors indicate that Aiden is an employee,rather than an independent contractor?

During the year,Walt travels from Seattle to Tokyo (Japan)on business.His time was spent as follows: 2 days travel (one day each way),2 days business,and 2 days personal.His expenses for the trip were as follows (meals and lodging reflect only the business portion): Air fare $3,000 Lodging 2,000 Meals and entertainment 1,000 ​ Presuming no reimbursement,Walt's deductible expenses are:

In the case of an office in the home deduction,the exclusive business use test does not apply when the home is used as a daycare center.

In terms of meeting the distance test for purposes of deducting moving expenses,which of the following statements is correct?

Employees who render an adequate accounting to the employer and are fully reimbursed will shift the 50% cutback adjustment to their employer.

Match the statements that relate to each other.(Note: Choice L may be used more than once. a.Must involve the same trade or business b.Must be for the convenience of the employer c.Meals while in route d.Lodging while in route e.Out-of-town job assignment lasts for more than one year f.Can include actual cost of parking g.Payment for services rendered based on tasks performed h.Excludes use of MACRS depreciation i.Taxpayer has tools and helper provided for him j.Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeing k.Paralegal obtains a law degree l.Correct match not provided -Nondeductible moving expense