Question 1

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

Question 2

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 these.F) A) and E)
G) A) and C)

Question 3

For tax purposes,"travel" is a broader classification than "transportation."

Accepted Answer

A) True 
 B)False

Question 4

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) E) and L)
N) D) and I)

Question 5

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

e."Home" for this purpose is the place o...

Question 6

Ralph made the following business gifts during the year. To Robert (a key client) at Christmas $50
To Angel (Robert's 8­year old daughter) on her birthday 20
To Art (Ralph's secretary) on his birthday ($3 was for gift wrapping) 30
To Paige (Ralph's boss) at Christmas 40
Presuming proper substantiation,Ralph's deduction is:

Accepted Answer

A)  $0.
B)  $53.
C)  $73.
D)  $78.
E)  $98.F) B) and E)
G) A) and D)

Question 7

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

Question 8

Which,if any,of the following is an advantage of using the simplified method for determining the office in the home deduction?

Accepted Answer

A)  No depreciation on the personal residence has to be computed.
B)  The exclusive use requirement does not have to be met.
C)  Allows the expense to be classified as a deduction for AGI.
D)  Can also be used for a residence that is rented (not owned) by the taxpayer.
E)  None of these.F) A) and D)
G) B) and D)

Question 9

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) 
-Actual cost method of determining auto expense

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) D) and I)
N) E) and J)

Question 10

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Accepted Answer

A) True 
 B)False

Question 11

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) 
-Tax home has changed

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 K)
N) K) and L)

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

Question 13

Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement.
-Sue uses her own helpers.

Accepted Answer

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

Question 14

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?

Accepted Answer

A)  Qualified tuition expenses under § 222.
B)  Contribution to traditional IRA.
C)  Cost of a CPA exam review course-taxpayer just began employment with an accounting firm.
D)  Office in the home deduction for a self-employed taxpayer.
E)  None of these.F) B) and D)
G) A) and C)

Question 15

A taxpayer who claims the standard deduction will not avoid the 2% floor on unreimbursed employee expenses.

Accepted Answer

A) True 
 B)False

Question 16

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

Accepted Answer

A) True 
 B)False

Question 17

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:
a.Ramon be better off than Ingrid?
b.Ingrid be better off than Ramon?

Accepted Answer

.If Ramon renders an adequate accountin...

Question 18

Taylor performs services for Jonathan on a regular basis.There exists considerable doubt as to whether Taylor is an employee or an independent contractor.
a.What can Jonathan do to clarify the matter?
b.Suppose Jonathan treats Taylor as an independent contractor but Taylor thinks she is an employee.What is Taylor's recourse,if any?

Accepted Answer

c.Jonathan can obtain a ruling from the ...

Question 19

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?

Accepted Answer

Myra needs to show that she has a reason...

Question 20

Alexis (a CPA)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e. ,went from self-employed to employee).

Accepted Answer

A) True 
 B)False

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

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?

Correct Answer
verified

Alexis (a CPA)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e. ,went from self-employed to employee).

Correct Answer
verified

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Actual cost method of determining auto expense

Correct Answer
verified

Which,if any,of the following is an advantage of using the simplified method for determining the office in the home deduction?

Correct Answer
verified

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Correct Answer
verified

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
verified

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

Correct Answer
verified

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

Correct Answer
verified

For tax purposes,"travel" is a broader classification than "transportation."

Correct Answer
verified

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?

Correct Answer
verified
Myra needs to show that she has a reason...
View Answer

Correct Answer
verified
.If Ramon renders an adequate accountin...
View Answer

A taxpayer who claims the standard deduction will not avoid the 2% floor on unreimbursed employee expenses.

Correct Answer
verified

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

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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Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement. -Sue uses her own helpers.

Correct Answer
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Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Tax home has changed

Correct Answer
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Correct Answer
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c.Jonathan can obtain a ruling from the ...
View 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 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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e."Home" for this purpose is the place o...
View Answer

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

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?

Correct AnswerverifiedShow Answer

Alexis (a CPA)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e. ,went from self-employed to employee).

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Actual cost method of determining auto expense

Correct AnswerverifiedShow Answer

Which,if any,of the following is an advantage of using the simplified method for determining the office in the home deduction?

Correct AnswerverifiedShow Answer

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

Correct AnswerverifiedShow Answer

For tax purposes,"travel" is a broader classification than "transportation."

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedMyra needs to show that she has a reason...View AnswerShow Answer

Correct Answerverified.If Ramon renders an adequate accountin...View AnswerShow Answer

A taxpayer who claims the standard deduction will not avoid the 2% floor on unreimbursed employee expenses.

Correct AnswerverifiedShow Answer

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

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

Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement. -Sue uses her own helpers.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Tax home has changed

Correct AnswerverifiedShow Answer

Correct Answerverifiedc.Jonathan can obtain a ruling from the ...View AnswerShow 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

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 Answerverifiede."Home" for this purpose is the place o...View AnswerShow Answer

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Myra needs to show that she has a reason...
View Answer

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.If Ramon renders an adequate accountin...
View Answer

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c.Jonathan can obtain a ruling from the ...
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e."Home" for this purpose is the place o...
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