Question 1

Ralph made the following business gifts during the year.  Presuming proper substantiation,Ralph's deduction is:

Accepted Answer

A)  $53.
B)  $73.
C)  $78.
D)  $98.
E)  None of the above.F) C) and E)
G) B) and E)

Question 2

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 3

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

Accepted Answer

A) True 
 B)False

Question 4

If an individual is ineligible to make a deductible contribution to a traditional IRA,nondeductible contributions can be made to a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 5

In terms of income tax treatment,what is the difference between common law and statutory employees?

Accepted Answer

Although subject to Social Security tax,...

Question 6

Regarding § 222 (qualified higher education deduction for tuition and related expenses),comment on the following:

Accepted Answer

The answer of Regarding § 222 (qualified higher education deduction...

Question 7

A moving expense deduction is not allowed 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 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 avoid the self-employment tax.
B)  To claim unreimbursed work-related expenses as a deduction for AGI.
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 the above.F) C) and E)
G) B) and E)

Question 11

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

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 14

Ramon and Ingrid work in the field of public relations and incur sizable entertainment expenses.Ramon is employed by a consumer products company,while Ingrid is a self-employed consultant.Regarding the tax treatment of the entertainment expenses,when would:

Accepted Answer

The answer of Ramon and Ingrid work in the field...

Question 15

Brian makes gifts as follows:
  * Includes $2 for engraving
Presuming adequate substantiation and no reimbursement,how much may Brian deduct?

Accepted Answer

$52 ($27 + $25).The deduction for Mr.Bro...

Question 16

If the cost of uniforms is deductible,their maintenance cost (e.g. ,laundry,dry cleaning,alterations)also is deductible.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Unfortunately,the IRS will not issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.

Accepted Answer

A) True 
 B)False

Question 19

Statutory employees:

Accepted Answer

A)  Report their expenses on Form 2106.
B)  Include common law employees.
C)  Are subject to income tax withholdings.
D)  Claim their expenses as deductions from AGI.
E)  None of the above.F) B) and E)
G) A) and E)

Question 20

One indicia of independent contractor (rather than employee)status is when the individual performing the services is paid based on time spent (rather than tasks performed).

Accepted Answer

A) True 
 B)False

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

In terms of income tax treatment,what is the difference between common law and statutory employees?

Correct AnswerverifiedAlthough subject to Social Security tax,...View AnswerShow Answer

Brian makes gifts as follows: * Includes $2 for engraving Presuming adequate substantiation and no reimbursement,how much may Brian deduct?

Correct Answerverified$52 ($27 + $25).The deduction for Mr.Bro...View AnswerShow Answer

If the cost of uniforms is deductible,their maintenance cost (e.g. ,laundry,dry cleaning,alterations)also is deductible.

Correct AnswerverifiedShow Answer

If an individual is ineligible to make a deductible contribution to a traditional IRA,nondeductible contributions can be made to a traditional IRA.

Correct AnswerverifiedShow Answer

Ramon and Ingrid work in the field of public relations and incur sizable entertainment expenses.Ramon is employed by a consumer products company,while Ingrid is a self-employed consultant.Regarding the tax treatment of the entertainment expenses,when would:

Correct AnswerverifiedShow Answer

Ralph made the following business gifts during the year. Presuming proper substantiation,Ralph's deduction is:

Correct AnswerverifiedShow Answer

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

One indicia of independent contractor (rather than employee)status is when the individual performing the services is paid based on time spent (rather than tasks performed).

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Statutory employees:

Correct AnswerverifiedShow Answer

Unfortunately,the IRS will not issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

Correct AnswerverifiedShow Answer

Regarding § 222 (qualified higher education deduction for tuition and related expenses),comment on the following:

Correct AnswerverifiedShow Answer

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Although subject to Social Security tax,...
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$52 ($27 + $25).The deduction for Mr.Bro...
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