Question 1

For purposes of the § 267 loss disallowance provision, a taxpayer's aunt is a related party.

Accepted Answer

A) True 
 B)False

Question 2

Discuss the application of the "one-year rule" on prepayments by a cash basis taxpayer.

Accepted Answer

The Regulations set forth the general ru...

Question 3

Trade or business expenses of a self-employed taxpayer should be treated as:

Accepted Answer

A)   Deductible for AGI on Schedule E.
B)   A deduction from AGI.
C)   Deductible for AGI on Schedule C.
D)   An itemized deduction if not reimbursed.
E)   None of these.F) All of the above
G) B) and E)

Question 4

During the year, Jim rented his vacation home for 200 days and lived in it for 19 days. During the remaining days, the vacation home was available for rental use. Is the vacation home subject to the limitation on the deductions of a personal/rental vacation home?

Accepted Answer

The vacation home is not subject to the ...

Question 5

In applying the $1 million limit on deducting executive compensation, what corporations are subject to the deduction limit? What executives are covered?

Accepted Answer

The $1 million limit on deducting the co...

Question 6

Andrew, who operates a laundry business, incurred the following expenses during the year. ∙ Parking ticket of $250 for one of his delivery vans that parked illegally.
∙ Parking ticket of $75 when he parked illegally while attending a rock concert in Tulsa.
∙ DUI ticket of $500 while returning from the rock concert.
∙ Attorney's fee of $600 associated with the DUI ticket.
What amount can Andrew deduct for these expenses?

Accepted Answer

A)   $0.
B)   $250.
C)   $600.
D)   $1,425.E) A) and B)
F) A) and C)

Question 7

Which of the following statements is correct in connection with the investigation of a business?

Accepted Answer

A)   If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned.
B)   Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired.
C)   That business must be related to the taxpayer's present business for any expense ever to be deductible.
D)   Regardless of whether the taxpayer is already engaged in the trade or business, the expenses must be capitalized and amortized.
E)   None of these.F) A) and B)
G) B) and D)

Question 8

Which of the following is a deduction for AGI?

Accepted Answer

A)   Contribution to a traditional IRA.
B)   Roof repairs to a personal use home.
C)   Safe deposit box rental fee in which stock certificates are stored.
D)   Property tax on personal residence.
E)   All of these.F) A) and B)
G) A) and C)

Exam 6: Deductions and Losses: in General

Trade or business expenses of a self-employed taxpayer should be treated as:

Correct Answer
verified

In applying the $1 million limit on deducting executive compensation, what corporations are subject to the deduction limit? What executives are covered?

Correct Answer
verified
The $1 million limit on deducting the co...
View Answer

Discuss the application of the "one-year rule" on prepayments by a cash basis taxpayer.

Correct Answer
verified
The Regulations set forth the general ru...
View Answer

Correct Answer
verified

During the year, Jim rented his vacation home for 200 days and lived in it for 19 days. During the remaining days, the vacation home was available for rental use. Is the vacation home subject to the limitation on the deductions of a personal/rental vacation home?

Correct Answer
verified
The vacation home is not subject to the ...
View Answer

For purposes of the § 267 loss disallowance provision, a taxpayer's aunt is a related party.

Correct Answer
verified

Which of the following is a deduction for AGI?

Correct Answer
verified

Which of the following statements is correct in connection with the investigation of a business?

Correct Answer
verified

Exam 6: Deductions and Losses: in General

Trade or business expenses of a self-employed taxpayer should be treated as:

Correct AnswerverifiedShow Answer

In applying the $1 million limit on deducting executive compensation, what corporations are subject to the deduction limit? What executives are covered?

Correct AnswerverifiedThe $1 million limit on deducting the co...View AnswerShow Answer

Discuss the application of the "one-year rule" on prepayments by a cash basis taxpayer.

Correct AnswerverifiedThe Regulations set forth the general ru...View AnswerShow Answer

Correct AnswerverifiedShow Answer

During the year, Jim rented his vacation home for 200 days and lived in it for 19 days. During the remaining days, the vacation home was available for rental use. Is the vacation home subject to the limitation on the deductions of a personal/rental vacation home?

Correct AnswerverifiedThe vacation home is not subject to the ...View AnswerShow Answer

For purposes of the § 267 loss disallowance provision, a taxpayer's aunt is a related party.

Correct AnswerverifiedShow Answer

Which of the following is a deduction for AGI?

Correct AnswerverifiedShow Answer

Which of the following statements is correct in connection with the investigation of a business?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The $1 million limit on deducting the co...
View Answer

Correct Answer
verified
The Regulations set forth the general ru...
View Answer

Correct Answer
verified

Correct Answer
verified
The vacation home is not subject to the ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified