Question 1

Meredith holds two jobs and attends graduate school on weekends.The education improves her skills, but does not qualify her for a new trade of business.Before going to the second job, she returns home for dinner.Relevant mileage is as follows: $$\begin{array} { l r } 
\text { Home to first job } & 9 \text { miles } \
\text { First job to second job } & 13 \text { miles } \
\text { Home to second job } & 15 \text { miles } \
\text { Home to university } & 7 \text { miles }
\end{array}$$ ​
How much of the mileage qualifies for deduction purposes?

Accepted Answer

27 miles.The mileage from the first job ...

Question 2

Julie was suffering from a viral infection that caused her to miss work for 90 days.During the first 30 days of her absence, she received her regular salary of $8,000 from her employer.For the next 60 days, she received $12,000 under an accident and health insurance policy purchased by her employer.The premiums on the health insurance policy were excluded from her gross income.During the last 30 days, Julie received $6,000 on an income replacement policy she had purchased.Of the $26,000 she received, Julie must include in gross income:

Accepted Answer

A)  $0.
B)  $6,000.
C)  $8,000.
D)  $14,000.
E)  $20,000.F) B) and E)
G) A) and B)

Question 3

Adam repairs power lines for the Egret Utilities Company.He is generally working on a power line during the lunch hour.He must eat when and where he can and still get his work done.He usually purchases something at a convenience store and eats in his truck.Egret reimburses Adam for the cost of his meals.

Accepted Answer

A)  Adam must include the reimbursement in his gross income.
B)  Adam can exclude the reimbursement from his gross income since the meals are provided for the convenience of the employer.
C)  Adam can exclude the reimbursement from his gross income because he eats the meals on the employer's business premises (the truck) .
D)  Adam may exclude from his gross income the difference between what he paid for the meals and what it would have cost him to eat at home.
E)  None of these.F) All of the above
G) A) and B)

Question 4

The First Chance Casino has gambling facilities, a bar, a restaurant, and a hotel.All employees are allowed to obtain food from the restaurant at no charge during working hours.In the case of the employees who operate the gambling facilities, bar, and restaurant, 60% of all of Casino's employees, the meals are provided for the convenience of the Casino.However, the hotel workers demanded equal treatment and therefore were also allowed to eat in the restaurant at no charge while they are at work.Which of the following is correct?

Accepted Answer

A)  All the employees are required to include the value of the meals in their gross income.
B)  Only the restaurant employees may exclude the value of their meals from gross income.
C)  Only the employees who work in gambling, the bar, and the restaurant may exclude the meals from gross income.
D)  All of the employees may exclude the value of the meals from gross income.
E)  None of these.F) None of the above
G) C) and D)

Question 5

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

Accepted Answer

A)  Aiden provides his own support services (e.g., work assistants) .
B)  Aiden obtained his training (i.e., job skills)  from his father.
C)  Aiden is paid based on hours worked.
D)  Aiden makes his services available to others.
E)  None of these.F) C) and E)
G) C) and D)

Question 6

By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Accepted Answer

A) True 
 B)False

Question 7

A U.S.citizen worked in a foreign country for the period July 1, 2016 through August 1, 2017.Her salary was $10,000 per month.Also, in 2016 she received $5,000 in dividends from foreign corporations (not qualified dividends) .No dividends were received in 2017.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 2016 or 2017.
B)  The taxpayer can exclude a portion of the salary from U.S.gross income in 2016 and 2017, and all of the dividend income.
C)  The taxpayer can exclude from U.S.gross income $60,000 salary in 2016, but in 2017 the taxpayer will exceed the twelve month limitation and, therefore, all of the 2017 compensation must be included in gross income.All of the dividends must be included in 2016 gross income.
D)  The taxpayer must include the dividend income of $5,000 in 2016 gross income, but the taxpayer can exclude a portion of the compensation income from U.S.gross income in 2016 and 2017.
E)  None of these.F) A) and E)
G) B) and C)

Question 8

Match the statements that relate to each other.(Note: Choice L may be used more than once.) 
-Nondeductible moving expense

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 L)
N) C) and J)

Question 9

In November 2017, Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2017 income tax return since she has not yet satisfied the 39-week time test.

Accepted Answer

A) True 
 B)False

Question 10

During the year, John went from Milwaukee to Alaska on business.Preceding a five-day business meeting, he spent four days vacationing at the beach.Excluding the vacation costs, his expenses for the trip are:   Air fare $3,200 Lodging 900 Meals 800 Entertainment 600\begin{array} { l r } 	ext { Air fare } & \$ 3,200 \	ext { Lodging } & 900 \	ext { Meals } & 800 \	ext { Entertainment } & 600\end{array} Air fare  Lodging  Meals  Entertainment ​$3,200900800600​  ? Presuming no reimbursement, deductible expenses are:

Accepted Answer

A)  $3,200.
B)  $3,900.
C)  $4,800.
D)  $5,500.
E)  None of these. F) D) and E)
G) C) and E)

Question 11

Match the statements that relate to each other.(Note: Choice L may be used more than once.) 
-Distance test (for moving expenses)  not satisfied

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) D) and K)
N) G) and L)

Question 12

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

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 H)
N) E) and J)

Question 13

Jake performs services for Maude.If Maude provides a helper and tools, this is indicative of independent contractor (rather than employee) status.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Match the statements that relate to each other.(Note: Choice L may be used more than once.) 
-Mixed use (both business and pleasure)  foreign travel

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 I)
N) B) and J)

Question 16

During 2017, Eva used her car as follows: 12,000 miles (business), 1,400 miles (commuting), and 4,000 miles (personal).In addition, she spent $440 for tolls (business) and $620 for parking (business).If Eva uses the automatic mileage method, what is the amount of her deduction?

Accepted Answer

$7.480.(12,000 miles...

Question 17

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans.Their total AGI for 2017 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 aboveF) A) and C)
G) A) and E)

Question 18

Madison and Christopher are staff accountants at a major public accounting firm.Both are pursuing a law degree in a night program at local law school.Madison contends that the cost of the program is a deduction for income tax purposes, while Christopher maintains that it is not.Who is correct and why?

Accepted Answer

Both are partly correct and incorrect.Th...

Question 19

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

Accepted Answer

A)  Only if the taxpayer itemizes deductions from AGI.
B)  To deduct that portion of the tuition in excess of that allowed under the lifetime learning credit.
C)  To cover the tuition of a son who does not qualify as taxpayer's dependent.
D)  Only if job related.
E)  None of these.F) None of the above
G) C) and D)

Question 20

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

Accepted Answer

A)  Work at the new location must involve a full-time job-part-time job will not suffice.
B)  The taxpayer has two years in which to satisfy the 39-weeks or 78-weeks requirement.
C)  The time test is waived for persons whose move follows retirement.
D)  The moving expense deduction cannot be claimed if the taxpayer has not yet met the time test.
E)  None of these.F) C) and D)
G) All of the above

Exam 11: Individuals As Employees and Proprietors

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Mixed use (both business and pleasure) foreign travel

Correct Answer
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Correct Answer
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27 miles.The mileage from the first job ...
View Answer

A U.S.citizen worked in a foreign country for the period July 1, 2016 through August 1, 2017.Her salary was $10,000 per month.Also, in 2016 she received $5,000 in dividends from foreign corporations (not qualified dividends) .No dividends were received in 2017.Which of the following is correct?

Correct Answer
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By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Correct Answer
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Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Distance test (for moving expenses) not satisfied

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

Correct Answer
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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.

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

Correct Answer
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During 2017, Eva used her car as follows: 12,000 miles (business), 1,400 miles (commuting), and 4,000 miles (personal).In addition, she spent $440 for tolls (business) and $620 for parking (business).If Eva uses the automatic mileage method, what is the amount of her deduction?

Correct Answer
verified
$7.480.(12,000 miles...
View Answer

Jake performs services for Maude.If Maude provides a helper and tools, this is indicative of independent contractor (rather than employee) status.

Correct Answer
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Correct Answer
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Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Nondeductible moving expense

Correct Answer
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In November 2017, Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2017 income tax return since she has not yet satisfied the 39-week time test.

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

Correct Answer
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Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans.Their total AGI for 2017 is $120,000.Each is employed and earns a salary of $65,000.What are their combined deductible contributions to traditional IRAs?

Correct Answer
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Correct Answer
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Correct Answer
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Both are partly correct and incorrect.Th...
View Answer

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

Correct Answer
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Correct Answer
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Exam 11: Individuals As Employees and Proprietors

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Mixed use (both business and pleasure) foreign travel

Correct AnswerverifiedShow Answer

Correct Answerverified27 miles.The mileage from the first job ...View AnswerShow Answer

A U.S.citizen worked in a foreign country for the period July 1, 2016 through August 1, 2017.Her salary was $10,000 per month.Also, in 2016 she received $5,000 in dividends from foreign corporations (not qualified dividends) .No dividends were received in 2017.Which of the following is correct?

Correct AnswerverifiedShow Answer

By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Distance test (for moving expenses) not satisfied

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

During 2017, Eva used her car as follows: 12,000 miles (business), 1,400 miles (commuting), and 4,000 miles (personal).In addition, she spent $440 for tolls (business) and $620 for parking (business).If Eva uses the automatic mileage method, what is the amount of her deduction?

Correct Answerverified$7.480.(12,000 miles...View AnswerShow Answer

Jake performs services for Maude.If Maude provides a helper and tools, this is indicative of independent contractor (rather than employee) status.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Nondeductible moving expense

Correct AnswerverifiedShow Answer

In November 2017, Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2017 income tax return since she has not yet satisfied the 39-week time test.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans.Their total AGI for 2017 is $120,000.Each is employed and earns a salary of $65,000.What are their combined deductible contributions to traditional IRAs?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBoth are partly correct and incorrect.Th...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
27 miles.The mileage from the first job ...
View Answer

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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$7.480.(12,000 miles...
View Answer

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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Correct Answer
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Both are partly correct and incorrect.Th...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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