Question 1

A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the business portion of tolls and parking.

Accepted Answer

A) True 
 B)False

Question 2

Kelly, an unemployed architect, moves from Boston to Phoenix to accept a job as a chef at a restaurant. Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Accepted Answer

A) True 
 B)False

Question 3

A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business and two days are spent on visiting relatives, only 60% of the airfare is deductible.

Accepted Answer

A) True 
 B)False

Question 4

Ben was hospitalized for back problems. While he was away from the job, he collected his regular salary from an employer-sponsored income protection insurance policy. Ben's employer-sponsored hospitalization insurance policy also paid for 90% of his medical expenses. Ben also collected on an income protection policy that he purchased. Which of the above sources of income are taxable? Explain the basis for excluding any item or items.

Accepted Answer

Only the collections on the employer-spo...

Question 5

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Characteristic of a taxpayer who has the status of an employee

Accepted Answer

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 yearF) Can include actual cost of parkingG) Payment for services rendered based on tasks performedH) Excludes use of MACRS depreciationI) Taxpayer has tools and helper provided for himJ) Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeingK) Paralegal obtains a law degreeL) Correct match not providedM) F) and J)
N) H) and K)

Question 6

Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Accepted Answer

A) True 
 B)False

Question 7

Pat generated self-employment income in 2016 of $76,000. The self-employment tax is:

Accepted Answer

A)  $0.
B)  $5,369.23.
C)  $10,738.46.
D)  $11,628.00.E) B) and C)
F) A) and D)

Question 8

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.

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

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Actual cost method of determining car expense

Accepted Answer

A)  Cover charge paid to entertain client at a night club.
B)  Deductible even if taxpayer does not take the new job
C)  Company picnic sponsored by employer
D)  Use of Federal per diem allowance to substantiate meals while in travel status
E)  Does not have to be job relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S. person who is employed overseas)  returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) C) and K)
N) A) and J)

Question 11

After graduating from college, Clint obtained employment in Omaha. In moving from his parents' home in Baltimore to Omaha, Clint incurred the following expenses:
​
  
a.How much may Clint deduct as moving expense?
b.​Would any deduction be allowed if Clint claimed the standard deduction for the year of the move? Explain.

Accepted Answer

The answer of After graduating from college, Clint obtained employment...

Question 12

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Accepted Answer

Most likely Ashley is self-employed, whi...

Question 13

If a taxpayer does not own a home but rents an apartment, the office in the home deduction is not available.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

The answer of Felicia, a recent college graduate, is employed...

Question 15

A U.S. citizen worked in a foreign country for the period July 1, 2015 through August 1, 2016. Her salary was $10,000 per month. Also, in 2015 she received $5,000 in dividends from foreign corporations (not qualified dividends) . No dividends were received in 2016. Which of the following is correct?

Accepted Answer

A)  The taxpayer cannot exclude any of the income because she was not present in the foreign country more than 330 days in either 2015 or 2016.
B)  The taxpayer can exclude a portion of the salary from U.S. gross income in 2015 and 2016, and all of the dividend income.
C)  The taxpayer can exclude from U.S. gross income $60,000 salary in 2015, but in 2016 the taxpayer will exceed the twelve month limitation and, therefore, all of the 2016 compensation must be included in gross income. All of the dividends must be included in 2015 gross income.
D)  The taxpayer must include the dividend income of $5,000 in 2015 gross income, but the taxpayer can exclude a portion of the compensation income from U.S. gross income in 2015 and 2016.
E)  None of these.F) A) and B)
G) None of the above

Question 16

In November 2016, Katie incurs unreimbursed moving expenses to accept a new job. Katie cannot deduct any of these expenses when she timely files her 2016 income tax return since she has not yet satisfied the 39-week time test.

Accepted Answer

A) True 
 B)False

Question 17

A worker may prefer to be classified as an employee (rather than an independent contractor)  for which of the following reasons:

Accepted Answer

A)  To claim unreimbursed work-related expenses as a deduction for AGI.
B)  To avoid the self-employment tax.
C)  To avoid the cutback adjustment on unreimbursed business entertainment expenses.
D)  To avoid the 2%-of-AGI floor on unreimbursed work-related expenses.
E)  None of these.F) A) and E)
G) C) and D)

Question 18

In choosing between the actual expense method and the automatic mileage method, a taxpayer should consider the cost of insurance on the automobile.

Accepted Answer

A) True 
 B)False

Question 19

Meg's employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness. The premiums for Meg's coverage were $1,800. Meg was absent from work for two months as a result of a kidney infection. Meg's employer's insurance company paid Meg's regular salary of $8,000 while she was away from work. Meg also collected $2,000 on a wage continuation policy she had purchased. Meg must include $11,800 in her gross income.

Accepted Answer

A) True 
 B)False

Question 20

James has a job that compels him to go to many different states during the year. It is possible that James was never away from his tax home during the year.

Accepted Answer

A) True 
 B)False

Exam 11: Individuals As Employees and Proprietors

If a taxpayer does not own a home but rents an apartment, the office in the home deduction is not available.

Correct Answer
verified

Correct Answer
verified

A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the business portion of tolls and parking.

Correct Answer
verified

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Characteristic of a taxpayer who has the status of an employee

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

In choosing between the actual expense method and the automatic mileage method, a taxpayer should consider the cost of insurance on the automobile.

Correct Answer
verified

In November 2016, Katie incurs unreimbursed moving expenses to accept a new job. Katie cannot deduct any of these expenses when she timely files her 2016 income tax return since she has not yet satisfied the 39-week time test.

Correct Answer
verified

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.

Correct Answer
verified

Pat generated self-employment income in 2016 of $76,000. The self-employment tax is:

Correct Answer
verified

A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business and two days are spent on visiting relatives, only 60% of the airfare is deductible.

Correct Answer
verified

A U.S. citizen worked in a foreign country for the period July 1, 2015 through August 1, 2016. Her salary was $10,000 per month. Also, in 2015 she received $5,000 in dividends from foreign corporations (not qualified dividends) . No dividends were received in 2016. Which of the following is correct?

Correct Answer
verified

Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Correct Answer
verified

Kelly, an unemployed architect, moves from Boston to Phoenix to accept a job as a chef at a restaurant. Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Correct Answer
verified

James has a job that compels him to go to many different states during the year. It is possible that James was never away from his tax home during the year.

Correct Answer
verified

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Correct Answer
verified
Most likely Ashley is self-employed, whi...
View Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Actual cost method of determining car expense

Correct Answer
verified

A worker may prefer to be classified as an employee (rather than an independent contractor) for which of the following reasons:

Correct Answer
verified

Correct Answer
verified
Only the collections on the employer-spo...
View Answer

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

If a taxpayer does not own a home but rents an apartment, the office in the home deduction is not available.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the business portion of tolls and parking.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Characteristic of a taxpayer who has the status of an employee

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

In choosing between the actual expense method and the automatic mileage method, a taxpayer should consider the cost of insurance on the automobile.

Correct AnswerverifiedShow Answer

In November 2016, Katie incurs unreimbursed moving expenses to accept a new job. Katie cannot deduct any of these expenses when she timely files her 2016 income tax return since she has not yet satisfied the 39-week time test.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Pat generated self-employment income in 2016 of $76,000. The self-employment tax is:

Correct AnswerverifiedShow Answer

A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business and two days are spent on visiting relatives, only 60% of the airfare is deductible.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Correct AnswerverifiedShow Answer

Kelly, an unemployed architect, moves from Boston to Phoenix to accept a job as a chef at a restaurant. Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Correct AnswerverifiedShow Answer

James has a job that compels him to go to many different states during the year. It is possible that James was never away from his tax home during the year.

Correct AnswerverifiedShow Answer

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Correct AnswerverifiedMost likely Ashley is self-employed, whi...View AnswerShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Actual cost method of determining car expense

Correct AnswerverifiedShow Answer

A worker may prefer to be classified as an employee (rather than an independent contractor) for which of the following reasons:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedOnly the collections on the employer-spo...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Most likely Ashley is self-employed, whi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Only the collections on the employer-spo...
View Answer

Correct Answer
verified