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

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Question 1

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Cathy takes five key clients to a nightclub and incurs the following costs: $320 limousine rental,$460 cover charge,$920 drinks and dinner,and $200 tips.Several days after the function,Cathy mails each client a pen costing $25.To the cost must be added $4 for engraving of the client's name.Assuming adequate substantiation and a business justification,what is Cathy's deduction?

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$1,255.$320 + [($460 + $920 + ...

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Question 2

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For self-employed taxpayers,travel expenses are not subject to the 2%-of-AGI floor.

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B) False

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Question 3

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After she finishes working at her main job, Ann returns home, has dinner, then drives to her second job. Ann may deduct the mileage between her home and second job.

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

In terms of meeting the distance test for purposes of deducting moving expenses,which of the following statements is correct?

Lloyd,a practicing CPA,pays tuition to attend law school.Since a law degree involves education leading to a new trade or business,the tuition is not deductible.

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

Ethan,a bachelor with no immediate family,uses the Pine Shadows Country Club exclusively for his business entertaining.None of Ethan's annual dues for his club membership are deductible.

After graduating from college,Clint obtained employment in Omaha.In moving from his parents' home in Baltimore to Omaha,Clint incurred the following expenses:

By itself,credit card receipts will constitute adequate substantiation for travel expenses.

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

Under the automatic mileage method,one rate does not cover every type of expense.For 2012,what are the rates for business use,education,moving,charitable,and medical?

Which of the following expenses,if any,qualify as deductible?

Qualified moving expenses include the cost of lodging but not meals during the move.

If a taxpayer does not own a home but rents an apartment,the office in the home deduction is not available.

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip.While in Chicago,taxpayer uses the hotel valet service to have some laundry done.The valet charge is a deductible travel expense.

The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.

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

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

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