Question 1

Faith just graduated from college and she needs advice on the tax treatment of the costs she incurs in connection with her first job (a sales person for a pharmaceutical company). Specifically, she wants to know about the following items:
a. Job search costs.
b. Business wardrobe cost.
c. Moving expenses.
d. Deduction for office in the home.

Accepted Answer

q. Not deductible since it involves Fait...

Question 2

In a direct transfer from one qualified retirement plan to another qualified retirement plan, the employer does not have to withhold 20% of the amount of the direct transfer.

Accepted Answer

A) True 
 B)False

Question 3

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) A) and F)
N) A) and B)

Question 4

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan. Her AGI is $118,000. What amount, if any, may Dana contribute to a Roth IRA in 2014?

Accepted Answer

A)   $0.
B)   $3,225.
C)   $4,033.
D)   $5,500.
E)   None of the above.F) A) and B)
G) B) and C)

Question 5

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 phase­out provision.

Accepted Answer

A) True 
 B)False

Question 6

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Qualified tuition and related expenses (under § 222)

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) B) and D)
N) B) and E)

Question 7

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

Accepted Answer

A)   Avoids the cutback adjustment as to business meals.
B)   All of the self-employment tax is deductible for income tax purposes.
C)   Work-related expenses are not subject to the 2%-of-AGI floor.
D)   A Schedule C does not have to be filed.
E)   None of the above.F) B) and E)
G) C) and E)

Question 8

Nick Lee is a linebacker for the Baltimore Ravens (a professional football club). During the football season he rents an apartment in a Baltimore suburb. The rest of the time he lives with his family in Ann Arbor (MI) and works at a local bank as a vice president in charge of public relations. Can Nick deduct his expenses while away from Ann Arbor? Explain.

Accepted Answer

Probably not. Although his personal resi...

Question 9

Travel status requires that the taxpayer be away from home overnight.
a. What does "away from home overnight" mean?
b. What tax advantages result from being in travel status?

Accepted Answer

g. "Home" for this purpose is the place ...

Question 10

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-Sue charges by the hour for her work.

Accepted Answer

A)  Indicates employee status.
B)  Indicates independent contractor status.C) A) and B)
D) undefined

Question 11

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 12

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-Sue files a Form 2106 with her Form 1040.

Accepted Answer

A)  Indicates employee status.
B)  Indicates independent contractor status.C) A) and B)
D) undefined

Question 13

Which, if any, of the following is subject to a cutback adjustment?

Accepted Answer

A)   An airline pilot for an executive jet rental company who pays his own travel expenses.
B)   Meals provided at cost to employees by a cafeteria funded by the employer.
C)   Fourth of July company picnic for employees.
D)   A trip to Bermuda awarded to the company's top salesperson.
E)   None of the above.F) C) and E)
G) A) and D)

Question 14

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,500 or the individual's compensation for the year.

Accepted Answer

A) True 
 B)False

Question 15

In which, if any, of the following situations is the automatic mileage available?

Accepted Answer

A)   A limousine to be rented by the owner for special occasions (e.g., weddings, high school proms) .
B)   The auto belongs to taxpayer's mother.
C)   One of seven cars used to deliver pizzas.
D)   MACRS statutory percentage method has been claimed on the automobile.
E)   None of the above.F) B) and C)
G) A) and E)

Question 16

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-Sue does not work for other parties.

Accepted Answer

A)  Indicates employee status.
B)  Indicates independent contractor status.C) A) and B)
D) undefined

Question 17

For the current football season, Tern Corporation pays $40,000 for a skybox (containing 12 seats) at Veterans Stadium for eight home games. Regular nonskybox seats at each game range from $120 to $150 a seat. In November, a Tern employee and ten clients use the skybox to attend a game. The event is preceded by a bona fide business discussion, and Tern spent $1,000 for food and drinks during the game. What is Tern's deduction?

Accepted Answer

$1,400. (12 seats × $150) + $1,000 = $2,...

Question 18

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 the above.F) None of the above
G) B) and C)

Question 19

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

Accepted Answer

A)   Ryan sets the work schedule.
B)   Ryan provides the tools used.
C)   Jordan files a Form 2106 with his Form 1040.
D)   Jordan is paid based on tasks performed.
E)   None of the above.F) A) and E)
G) C) and D)

Question 20

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

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

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

Correct Answer
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Travel status requires that the taxpayer be away from home overnight. a. What does "away from home overnight" mean? b. What tax advantages result from being in travel status?

Correct Answer
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g. "Home" for this purpose is the place ...
View Answer

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

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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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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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 Answer
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The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,500 or the individual's compensation for the year.

Correct Answer
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Correct Answer
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Probably not. Although his personal resi...
View Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue does not work for other parties.

Correct Answer
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Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue charges by the hour for her work.

Correct Answer
verified

Correct Answer
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q. Not deductible since it involves Fait...
View Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Qualified tuition and related expenses (under § 222)

Correct Answer
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Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue files a Form 2106 with her Form 1040.

Correct Answer
verified

In which, if any, of the following situations is the automatic mileage available?

Correct Answer
verified

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

Correct Answer
verified

In a direct transfer from one qualified retirement plan to another qualified retirement plan, the employer does not have to withhold 20% of the amount of the direct transfer.

Correct Answer
verified

Correct Answer
verified
$1,400. (12 seats × $150) + $1,000 = $2,...
View 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 phaseout provision.

Correct Answer
verified

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan. Her AGI is $118,000. What amount, if any, may Dana contribute to a Roth IRA in 2014?

Correct Answer
verified

Which, if any, of the following is subject to a cutback adjustment?

Correct Answer
verified

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

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

Correct AnswerverifiedShow Answer

Travel status requires that the taxpayer be away from home overnight. a. What does "away from home overnight" mean? b. What tax advantages result from being in travel status?

Correct Answerverifiedg. "Home" for this purpose is the place ...View AnswerShow Answer

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

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

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

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

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,500 or the individual's compensation for the year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedProbably not. Although his personal resi...View AnswerShow Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue does not work for other parties.

Correct AnswerverifiedShow Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue charges by the hour for her work.

Correct AnswerverifiedShow Answer

Correct Answerverifiedq. Not deductible since it involves Fait...View AnswerShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Qualified tuition and related expenses (under § 222)

Correct AnswerverifiedShow Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue files a Form 2106 with her Form 1040.

Correct AnswerverifiedShow Answer

In which, if any, of the following situations is the automatic mileage available?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a direct transfer from one qualified retirement plan to another qualified retirement plan, the employer does not have to withhold 20% of the amount of the direct transfer.

Correct AnswerverifiedShow Answer

Correct Answerverified$1,400. (12 seats × $150) + $1,000 = $2,...View AnswerShow 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 phase­out provision.

Correct AnswerverifiedShow Answer

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan. Her AGI is $118,000. What amount, if any, may Dana contribute to a Roth IRA in 2014?

Correct AnswerverifiedShow Answer

Which, if any, of the following is subject to a cutback adjustment?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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g. "Home" for this purpose is the place ...
View Answer

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Probably not. Although his personal resi...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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q. Not deductible since it involves Fait...
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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$1,400. (12 seats × $150) + $1,000 = $2,...
View 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 phaseout provision.

Correct Answer
verified

Correct Answer
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Correct Answer
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