Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A partnership plans to set up a retirement plan to benefit the partners and the employees.All of the following retirement plans are appropriate except

Accepted Answer

A)  an H.R. 10 (Keogh) plan. 
B)  a SEP IRA. 
C)  a SIMPLE plan. 
D)  a Solo 401(k). 
A)  an H.R. 10 (Keogh) plan. 
B)  a SEP IRA. 
C)  a SIMPLE plan. 
D)  a Solo 401(k).

Question 3

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?

Accepted Answer

With regard to the tax consequences,Gina

Question 4

Nonqualified deferred compensation plans can discriminate in favor of highly compensated executives.

Accepted Answer

A) True 
 B)False

Question 5

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Accepted Answer

A) True 
 B)False

Question 6

Angie starts a new job and becomes covered under the employer's health insurance plan which has an annual deductible of $2,400.Angie contributes the maximum amount into a Health Savings Account.Which of the following statements regarding Angie's Health Savings Account is correct?

Accepted Answer

A)  Angie can contribute and deduct $1,200 for AGI. 
B)  Angie's contribution will be deductible if she itemizes, and the contribution along with her out-of-pocket medical expenses exceed 10% of AGI. 
C)  If Angie withdraws $500 to pay for X-rays, the $500 is taxable. 
D)  Interest income earned on the HCA is taxable. 
A)  Angie can contribute and deduct $1,200 for AGI. 
B)  Angie's contribution will be deductible if she itemizes, and the contribution along with her out-of-pocket medical expenses exceed 10% of AGI. 
C)  If Angie withdraws $500 to pay for X-rays, the $500 is taxable. 
D)  Interest income earned on the HCA is taxable.

Question 7

Which of the following statements regarding Health Savings Accounts is incorrect?

Accepted Answer

A)  Taxpayers are allowed to deduct contributions to a health savings account for AGI. 
B)  All taxpayers are eligible to establish a health savings account. 
C)  Distributions from a health savings account are excluded from gross income if used to pay qualified medical expenses. 
D)  Health savings account contributions are limited to the lesser of 100% of annual deductible under a high-deductible health plan or $3,400 for taxpayers without family coverage. 
A)  Taxpayers are allowed to deduct contributions to a health savings account for AGI. 
B)  All taxpayers are eligible to establish a health savings account. 
C)  Distributions from a health savings account are excluded from gross income if used to pay qualified medical expenses. 
D)  Health savings account contributions are limited to the lesser of 100% of annual deductible under a high-deductible health plan or $3,400 for taxpayers without family coverage.

Question 8

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?

Accepted Answer

A)  $2,600 
B)  $4,600 
C)  $6,300 
D)  $6,800 
A)  $2,600 
B)  $4,600 
C)  $6,300 
D)  $6,800

Question 9

West's adjusted gross income was $90,000.During the current year he incurred and paid the following:
 
None of the expenses were reimbursed.Assuming he can itemize deductions,how much should West claim as miscellaneous itemized deductions (after limitations have been applied)?

Accepted Answer

A)  $2,700 
B)  $4,500 
C)  $3,500 
D)  $5,300 
A)  $2,700 
B)  $4,500 
C)  $3,500 
D)  $5,300

Question 10

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?

Accepted Answer

A)  Tobey does not have to recognize any income from receiving the stock until his rights to the stock are fully vested. 
B)  Tobey must report $12,000 as income due to the receipt of the stock in the current year. 
C)  Tobey may elect to report the $12,000 FMV of the stock as ordinary income in the current year. 
D)  If Tobey elects to report $12,000 as income in the current year and the stock price falls to $5 per share when his rights to the stock are vested, Tobey is not allowed to deduct a loss. 
A)  Tobey does not have to recognize any income from receiving the stock until his rights to the stock are fully vested. 
B)  Tobey must report $12,000 as income due to the receipt of the stock in the current year. 
C)  Tobey may elect to report the $12,000 FMV of the stock as ordinary income in the current year. 
D)  If Tobey elects to report $12,000 as income in the current year and the stock price falls to $5 per share when his rights to the stock are vested, Tobey is not allowed to deduct a loss.

Question 11

A gift from an employee to his or her superior does not qualify as a business gift.

Accepted Answer

A) True 
 B)False

Question 12

What factors are considered in determining whether an expense is a deductible travel expense?

Accepted Answer

Factors to consider include:
1.Whether t

Question 13

David acquired an automobile for $30,000 for use in his unincorporated business at the beginning of 2017 and used the standard mileage rate method in 2017.He plans to switch to the actual expense method for 2018.The automobile was used 25,000 miles in 2017.What is the amount of the adjusted basis of the automobile for purposes of computing depreciation in 2018?

Accepted Answer

A)  $30,000 
B)  $16,625 
C)  $23,750 
D)  $20,000 
A)  $30,000 
B)  $16,625 
C)  $23,750 
D)  $20,000

Question 14

When are home-office expenses deductible?

Accepted Answer

Office-in-home expenses are deductible i

Question 15

Which of the following situations will disqualify a taxpayer from taking a deduction for moving expenses?

Accepted Answer

A)  Pam moves from Phoenix to Los Angeles to take a new job. She works at the Los Angeles job for 45 weeks before starting a new job in Las Vegas. 
B)  Paul moves from Boston to Miami to start a new business selling t-shirts. The business is not successful and Paul returns to Boston after 52 weeks. 
C)  Phyllis moves from Seattle to San Francisco to open a coffee bar. She still owns the coffee bar and lives in San Francisco 90 weeks after her move. 
D)  Marva moves from Dallas to Washington, DC, in her job as an IRS agent. She is still working at the IRS Washington office after one year. 
A)  Pam moves from Phoenix to Los Angeles to take a new job. She works at the Los Angeles job for 45 weeks before starting a new job in Las Vegas. 
B)  Paul moves from Boston to Miami to start a new business selling t-shirts. The business is not successful and Paul returns to Boston after 52 weeks. 
C)  Phyllis moves from Seattle to San Francisco to open a coffee bar. She still owns the coffee bar and lives in San Francisco 90 weeks after her move. 
D)  Marva moves from Dallas to Washington, DC, in her job as an IRS agent. She is still working at the IRS Washington office after one year.

Question 16

Frank is a self-employed CPA whose 2017 net earnings from his trade or business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes) is $240,000.What is the maximum contribution that Frank can make on his behalf to his H.R.10 (Keogh) plan in 2017?

Accepted Answer

A)  $67,500 
B)  $48,000 
C)  $54,000 
D)  $60,000 
A)  $67,500 
B)  $48,000 
C)  $54,000 
D)  $60,000

Question 17

Explain when educational expenses are deductible for an employee.

Accepted Answer

Educational expenses are deductible if t

Question 18

Self-employed individuals receive a for AGI deduction for 50% of entertainment expenses paid or incurred in the trade or business.

Accepted Answer

A) True 
 B)False

Question 19

Brittany,who is an employee,drove her automobile a total of 20,000 business miles in 2017.This represents about 75% of the auto's use.She has receipts as follows:
 
Brittany's AGI for the year is $50,000,and her employer does not provide any reimbursement.She uses the standard mileage rate method.After application of any relevant floors or other limitations,Brittany can deduct

Accepted Answer

A)  $10,400. 
B)  $12,400. 
C)  $11,400. 
D)  $9,700. 
A)  $10,400. 
B)  $12,400. 
C)  $11,400. 
D)  $9,700.

Question 20

SIMPLE retirement plans allow a higher level of employer contributions than do SEP IRAs.

Accepted Answer

A) True 
 B)False

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

A partnership plans to set up a retirement plan to benefit the partners and the employees.All of the following retirement plans are appropriate except

Nonqualified deferred compensation plans can discriminate in favor of highly compensated executives.

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Angie starts a new job and becomes covered under the employer's health insurance plan which has an annual deductible of $2,400.Angie contributes the maximum amount into a Health Savings Account.Which of the following statements regarding Angie's Health Savings Account is correct?

Which of the following statements regarding Health Savings Accounts is incorrect?

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?

West's adjusted gross income was $90,000.During the current year he incurred and paid the following: None of the expenses were reimbursed.Assuming he can itemize deductions,how much should West claim as miscellaneous itemized deductions (after limitations have been applied)?

A gift from an employee to his or her superior does not qualify as a business gift.

What factors are considered in determining whether an expense is a deductible travel expense?

When are home-office expenses deductible?

Which of the following situations will disqualify a taxpayer from taking a deduction for moving expenses?

Frank is a self-employed CPA whose 2017 net earnings from his trade or business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes) is $240,000.What is the maximum contribution that Frank can make on his behalf to his H.R.10 (Keogh) plan in 2017?

Explain when educational expenses are deductible for an employee.

Self-employed individuals receive a for AGI deduction for 50% of entertainment expenses paid or incurred in the trade or business.

SIMPLE retirement plans allow a higher level of employer contributions than do SEP IRAs.

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 9: Employee Expenses and Deferred Compensation

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

A partnership plans to set up a retirement plan to benefit the partners and the employees.All of the following retirement plans are appropriate except

Nonqualified deferred compensation plans can discriminate in favor of highly compensated executives.

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Angie starts a new job and becomes covered under the employer's health insurance plan which has an annual deductible of $2,400.Angie contributes the maximum amount into a Health Savings Account.Which of the following statements regarding Angie's Health Savings Account is correct?

Which of the following statements regarding Health Savings Accounts is incorrect?

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?

West's adjusted gross income was $90,000.During the current year he incurred and paid the following: None of the expenses were reimbursed.Assuming he can itemize deductions,how much should West claim as miscellaneous itemized deductions (after limitations have been applied)?

A gift from an employee to his or her superior does not qualify as a business gift.

What factors are considered in determining whether an expense is a deductible travel expense?

When are home-office expenses deductible?

Which of the following situations will disqualify a taxpayer from taking a deduction for moving expenses?

Frank is a self-employed CPA whose 2017 net earnings from his trade or business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes) is $240,000.What is the maximum contribution that Frank can make on his behalf to his H.R.10 (Keogh) plan in 2017?

Explain when educational expenses are deductible for an employee.

Self-employed individuals receive a for AGI deduction for 50% of entertainment expenses paid or incurred in the trade or business.

SIMPLE retirement plans allow a higher level of employer contributions than do SEP IRAs.

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters