Question 1

For tax purposes, a statutory employee is treated the same as a common law employee.

Accepted Answer

A) True 
 B)False

Question 2

Donna, age 27 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $116,000.What amount, if any, may Donna contribute to a Roth IRA in 2012?

Accepted Answer

A) $0. 
B) $3,000. 
C) $4,000. 
D) $5,000. 
E) None of the above. 
A) $0. 
B) $3,000. 
C) $4,000. 
D) $5,000. 
E) None of the above.

Question 3

In contrasting the reporting procedures of employees and self-employed persons regarding job-related transactions, which of the following items involve self-employed?

Accepted Answer

A) Schedule C of Form 1040. 
B) Form 2106. 
C) Form W-2. 
D) Schedule A of Form 1040. 
E) None of the above. 
A) Schedule C of Form 1040. 
B) Form 2106. 
C) Form W-2. 
D) Schedule A of Form 1040. 
E) None of the above.

Question 4

Beth, age 51, has a traditional deductible IRA with an account balance of $221,419 of which $160,400 represents contributions and $61,019 represents earnings.In 2012, she converts her traditional IRA into a Roth IRA.What amount, if any, must Beth include in her gross income in 2012?

Accepted Answer

A) $0. 
B) $61,019. 
C) $160,400. 
D) $221,419. 
E) None of the above. 
A) $0. 
B) $61,019. 
C) $160,400. 
D) $221,419. 
E) None of the above.

Question 5

One of the tax advantages of being self-employed (rather than being an employee) is:

Accepted Answer

A) The self-employment tax is lower than the Social Security tax. 
B) The cutback adjustment does not apply. 
C) Job-related expenses are deductions for AGI. 
D) The actual cost method for deducting the business use of an automobile can be selected. 
E) A deduction for an office in the home is available. 
A) The self-employment tax is lower than the Social Security tax. 
B) The cutback adjustment does not apply. 
C) Job-related expenses are deductions for AGI. 
D) The actual cost method for deducting the business use of an automobile can be selected. 
E) A deduction for an office in the home is available.

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

When contributions are made to a Roth IRA, they are deductible by the participant.Later distributions from a the IRA, however, are fully taxed.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Qualified moving expenses include the cost of lodging but not meals during the move.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Tickets to a theater performance or sporting event can be treated as either business entertainment or a business gift if the taxpayer does not accompany the client to the event.

Accepted Answer

A) True 
 B)False

Question 12

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

Accepted Answer

Jacob has no commuting expense

Question 13

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

Accepted Answer

A) Ryan provides his own support services (e.g., work assistants). 
B) Ryan obtained his training (i.e., job skills) from Jordan. 
C) Ryan is paid based on tasks performed. 
D) Ryan makes his services available to others. 
E) None of the above. 
A) Ryan provides his own support services (e.g., work assistants). 
B) Ryan obtained his training (i.e., job skills) from Jordan. 
C) Ryan is paid based on tasks performed. 
D) Ryan makes his services available to others. 
E) None of the above.

Question 14

Tired of renting, Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire qualifies as a uniform expense.

Accepted Answer

A) True 
 B)False

Question 15

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,000 or the individual's compensation for the year.

Accepted Answer

A) True 
 B)False

Question 16

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

Accepted Answer

A) True 
 B)False

Question 17

Frank, a recently retired FBI agent, pays job search expenses to obtain a position with a city police department.Frank's job search expenses do not qualify as deductions.

Accepted Answer

A) True 
 B)False

Question 18

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Accepted Answer

She can deduct her moving expe

Question 19

During the year, Oscar travels from Raleigh to Moscow (Russia) 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):   Presuming no reimbursement, Oscar's deductible expenses are:

Accepted Answer

A) $6,000. 
B) $5,500. 
C) $4,500. 
D) $3,500. 
E) None of the above. 
A) $6,000. 
B) $5,500. 
C) $4,500. 
D) $3,500. 
E) None of the above.

Question 20

Christopher just purchased an automobile for $40,000 which he plans to claim 100% as being for business use.In order to take advantage of MACRS and § 179, he plans to use the actual cost method for determining his deduction in the first year.In subsequent years, he will switch to the automatic mileage method.Comment on Christopher's proposed approach.

Accepted Answer

First, limitations are imposed on how mu

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

For tax purposes, a statutory employee is treated the same as a common law employee.

Donna, age 27 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $116,000.What amount, if any, may Donna contribute to a Roth IRA in 2012?

In contrasting the reporting procedures of employees and self-employed persons regarding job-related transactions, which of the following items involve self-employed?

Beth, age 51, has a traditional deductible IRA with an account balance of $221,419 of which $160,400 represents contributions and $61,019 represents earnings.In 2012, she converts her traditional IRA into a Roth IRA.What amount, if any, must Beth include in her gross income in 2012?

One of the tax advantages of being self-employed (rather than being an employee) is:

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.

When contributions are made to a Roth IRA, they are deductible by the participant.Later distributions from a the IRA, however, are fully taxed.

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

Qualified moving expenses include the cost of lodging but not meals during the move.

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

Tickets to a theater performance or sporting event can be treated as either business entertainment or a business gift if the taxpayer does not accompany the client to the event.

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

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

Tired of renting, Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire qualifies as a uniform expense.

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,000 or the individual's compensation for the year.

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

Frank, a recently retired FBI agent, pays job search expenses to obtain a position with a city police department.Frank's job search expenses do not qualify as deductions.

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

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

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

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