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

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Question 71

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The work-related expenses of an independent contractor will not be subject to the 2%-of-AGI floor.

A) True
B) False

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Question 72

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For the current year,Horton was employed as a deputy sheriff of a county.He had AGI of $50,000 and the following unreimbursed employee expenses: How much of these expenses are allowed as deductions from AGI?

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$1,400.$1,000 + $1,000 + $400 = $2,400 -...

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Question 73

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Every year,Penguin Corporation gives each employee a fruit basket and a bottle of wine at Christmas.These gifts are not subject to the cutback adjustment.

Allowing for the cutback adjustment (50% reduction for meals and entertainment) ,which of the following trips,if any,will qualify for the travel expense deduction?

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

In terms of IRS attitude,what do the following expenses have in common?

Aiden is the city sales manager for "Wings," a national fast food franchise.Every working day,Aiden drives his car as follows: Aiden's deductible mileage is:

An education expense deduction is not allowed if the education results in a promotion or pay raise for the employee.

Meg teaches the fifth grade at a local school.During the year,she spends $1,200 for school supplies for use in her classroom.On her income tax return,some of this expense is not reported and the balance is deducted in two different places.Explain what has probably happened.

Regarding tax favored retirement plans for employees and self-employed persons,comment on the following:

Tickets to a theater performance or sporting event can be treated as either business entertainment or a business gift if the taxpayer does not accompany the client to the event.

Myra's classification of those who work for her as independent contractors is being questioned by the IRS.It is the position of the IRS that these workers are really employees.What type of factors can Myra utilize to justify her classification?

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

Mallard Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is subject to the cutback adjustment.

In the current year,Bo accepted employment with a Kansas City law firm after graduating from law school.Her expenses for the year are listed below:

In November 2012,Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2012 income tax return since she has not yet satisfied the 39-week time test.

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?

Due to a merger,Allison transfers from Miami to Chicago.Under a new job description,she is reclassified from employee to independent contractor status.Her moving expenses,which are not reimbursed,are as follows: Allison's deductible moving expense is:

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

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain