Question 1

Which, if any, of the following expenses is subject to the 2%-of-AGI floor?

Accepted Answer

A) Gambling losses (to the extent of gambling gains). 
B) Moving expenses (not reimbursed by employer). 
C) Teaching supplies (in excess of $250) purchased by a fifth grade teacher. 
D) Union dues of self-employed machinist. 
E) None of the above. 
A) Gambling losses (to the extent of gambling gains). 
B) Moving expenses (not reimbursed by employer). 
C) Teaching supplies (in excess of $250) purchased by a fifth grade teacher. 
D) Union dues of self-employed machinist. 
E) None of the above.

Question 2

After the automatic mileage rate has been set by the IRS for a year, it can later be changed by the IRS.

Accepted Answer

A) True 
 B)False

Question 3

If a business retains someone to provide services, that person may either be an employee or be self-employed (i.e., independent contractor).

Accepted Answer

The answer of If a business retains someone to provide...

Question 4

The portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

Accepted Answer

A) True 
 B)False

Question 5

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening.His expenses were as follows:
   What is Alfredo's deductible expense for the trip?

Accepted Answer

$1,002 ($900 + $60 +

Question 6

Aiden is the city sales manager for "Wings," a national fast food franchise.Every working day, Aiden drives his car as follows:   Aiden's deductible mileage is:

Accepted Answer

A) 0 miles. 
B) 30 miles. 
C) 46 miles. 
D) 76 miles. 
E) None of the above. 
A) 0 miles. 
B) 30 miles. 
C) 46 miles. 
D) 76 miles. 
E) None of the above.

Question 7

Joyce, age 39, and Sam, age 40, who have been married for seven years, are both active participants in qualified retirement plans.Their total AGI for 2012 is $120,000.Each is employed and earns a salary of $65,000.What are their combined deductible contributions to traditional IRAs?

Accepted Answer

A) $0. 
B) $3,000. 
C) $4,000. 
D) $8,000. 
E) None of the above. 
A) $0. 
B) $3,000. 
C) $4,000. 
D) $8,000. 
E) None of the above.

Question 8

A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a job at the new location.

Accepted Answer

A) True 
 B)False

Question 9

For the current year, Horton was employed as a deputy sheriff of a county.He had AGI of $50,000 and the following unreimbursed employee expenses:
   How much of these expenses are allowed as deductions from AGI?

Accepted Answer

$1,400.$1,000 + $1,000 + $400 = $2,400 -

Question 10

An individual is considered an active participant in an employer-sponsored retirement plan merely because an individual's spouse is an active participant for any part of a plan year in applying the IRA phase-out provision.

Accepted Answer

A) True 
 B)False

Question 11

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip.While in Chicago, taxpayer uses the hotel valet service to have some laundry done.The valet charge is a deductible travel expense.

Accepted Answer

A) True 
 B)False

Question 12

Contributions to a Roth IRA can be made up to the due date (excluding extensions) of the taxpayer's income tax return.

Accepted Answer

A) True 
 B)False

Question 13

Arnold is employed as an assistant manager in the furniture division of a national chain of department stores.He is a recent college graduate with a degree in marketing.During 2012, he enrolls in the evening MBA program of a local university and incurs the following expenses: tuition, $4,200; books and computer supplies, $800; transportation expense to and from the university, $450; and meals while on campus, $400.Arnold is single and his annual AGI is $66,000.As to these expenses, what are Arnold's:

Accepted Answer

The answer of Arnold is employed as an assistant manager...

Question 14

Amy works as an auditor for a large major CPA firm.During the months of September through November of each year, she is permanently assigned to the team auditing Garnet Corporation.As a result, every day she drives from her home to Garnet and returns home after work.Mileage is as follows:   For these three months, Amy's deductible mileage for each workday is:

Accepted Answer

A) 0. 
B) 30. 
C) 35. 
D) 60. 
E) None of the above. 
A) 0. 
B) 30. 
C) 35. 
D) 60. 
E) None of the above.

Question 15

The work-related expenses of an independent contractor will not be subject to the 2%-of-AGI floor.

Accepted Answer

A) True 
 B)False

Question 16

Janet, who lives and works in Newark, travels to Atlanta for a Thursday-Friday business conference. She stays over after the conference and visits relatives and friends on Saturday. Under certain circumstances, the meals and lodging expenses for Saturday can be considered as business related.

Accepted Answer

A) True 
 B)False

Question 17

Henry entertains several of his key clients on January 1 of the current year.Expenses paid by Henry are as follows:   Presuming proper substantiation, Henry's deduction is:

Accepted Answer

A) $1,220. 
B) $740. 
C) $640. 
D) $610. 
E) None of the above. 
A) $1,220. 
B) $740. 
C) $640. 
D) $610. 
E) None of the above.

Question 18

A deduction for parking and other traffic violations is allowed under the actual cost method but not the automatic mileage method.

Accepted Answer

A) True 
 B)False

Question 19

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes.During 2012, his mileage was as follows:
   How much can Rod claim for mileage?

Accepted Answer

$6,313 [(8,800 miles ´ $0.555,

Question 20

The § 222 deduction for tuition and related expenses is available:

Accepted Answer

A) Regardless of the amount of a taxpayer's MAGI. 
B) To cover room and board expenses to attend college. 
C) To a married taxpayer filing a separate return. 
D) Only if a taxpayer does not claim the standard deduction. 
E) None of the above. 
A) Regardless of the amount of a taxpayer's MAGI. 
B) To cover room and board expenses to attend college. 
C) To a married taxpayer filing a separate return. 
D) Only if a taxpayer does not claim the standard deduction. 
E) None of the above.

Exam 9: Deductions: Employee and Self-Employed Related Expenses

Which, if any, of the following expenses is subject to the 2%-of-AGI floor?

After the automatic mileage rate has been set by the IRS for a year, it can later be changed by the IRS.

If a business retains someone to provide services, that person may either be an employee or be self-employed (i.e., independent contractor).

The portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening.His expenses were as follows: What is Alfredo's deductible expense for the trip?

Aiden is the city sales manager for "Wings," a national fast food franchise.Every working day, Aiden drives his car as follows: Aiden's deductible mileage is:

Joyce, age 39, and Sam, age 40, who have been married for seven years, are both active participants in qualified retirement plans.Their total AGI for 2012 is $120,000.Each is employed and earns a salary of $65,000.What are their combined deductible contributions to traditional IRAs?

A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a job at the new location.

For the current year, Horton was employed as a deputy sheriff of a county.He had AGI of $50,000 and the following unreimbursed employee expenses: How much of these expenses are allowed as deductions from AGI?

An individual is considered an active participant in an employer-sponsored retirement plan merely because an individual's spouse is an active participant for any part of a plan year in applying the IRA phase-out provision.

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip.While in Chicago, taxpayer uses the hotel valet service to have some laundry done.The valet charge is a deductible travel expense.

Contributions to a Roth IRA can be made up to the due date (excluding extensions) of the taxpayer's income tax return.

The work-related expenses of an independent contractor will not be subject to the 2%-of-AGI floor.

Janet, who lives and works in Newark, travels to Atlanta for a Thursday-Friday business conference. She stays over after the conference and visits relatives and friends on Saturday. Under certain circumstances, the meals and lodging expenses for Saturday can be considered as business related.

Henry entertains several of his key clients on January 1 of the current year.Expenses paid by Henry are as follows: Presuming proper substantiation, Henry's deduction is:

A deduction for parking and other traffic violations is allowed under the actual cost method but not the automatic mileage method.

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes.During 2012, his mileage was as follows: How much can Rod claim for mileage?

The § 222 deduction for tuition and related expenses is available:

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters