Question 1

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

Question 2

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

Accepted Answer

Jacob has no commuting expense...

Question 3

Madison is an instructor of fine arts at a local community college.If she spends $600 (not reimbursed)on art supplies for her classes,$250 of this amount can be claimed as a deduction for AGI.

Accepted Answer

A) True 
 B)False

Question 4

In May 2015,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2015 any deduction for moving expenses he may have claimed on his 2014 tax return.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Meg's employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness.The premiums for Meg's coverage were $1,800.Meg was absent from work for two months as a result of a kidney infection.Meg's employer's insurance company paid Meg's regular salary of $8,000 while she was away from work.Meg also collected $2,000 on a wage continuation policy she had purchased.Meg must include $11,800 in her gross income.

Accepted Answer

A) True 
 B)False

Question 7

Only self-employed individuals are required to make estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 8

Evaluate the following statements: I.De minimis fringe benefits are those that are so immaterial that accounting for them is impractical.
II) De minimis fringe benefits are subject to strict anti-discrimination requirements.
III) Generally,a fringe benefit of less than $50 is considered de minimis and can be excluded from gross income.

Accepted Answer

A)   Only I is true.
B)   Only III is true.
C)   Only I and III are true.
D)   I,II,and III are true.
E)   None of these.F) A) and B)
G) All of the above

Question 9

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

Accepted Answer

A)   Only if the taxpayer itemizes deductions from AGI.
B)   To deduct that portion of the tuition in excess of that allowed under the lifetime learning credit.
C)   To cover the tuition of a son who does not qualify as taxpayer's dependent.
D)   Only if job related.
E)   None of these.F) All of the above
G) A) and E)

Question 10

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 these.F) C) and D)
G) B) and D)

Question 11

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Accepted Answer

A)   Heather reduced her salary by $1,200,actually spent $1,500,and received only $1,200 as reimbursement for her medical expenses.Heather's gross income will be reduced by $1,500.
B)   Heather reduced her salary by $1,200,and received only $900 as reimbursement for her actual medical expenses.She is not refunded the $300 remaining balance,but her gross income is reduced by $1,200.
C)   Heather reduced her salary by $1,200,and received only $800 as reimbursement for her medical expenses.She is not refunded the $400.Her gross income is reduced by $800.
D)   Heather reduced her salary by $1,200,and received only $900 as reimbursement for her medical expenses.She forfeits the $300.Her gross income is reduced by $300.
E)   None of these.F) A) and B)
G) A) and C)

Question 12

A moving expense deduction is allowed even 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 13

Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.

Accepted Answer

A) True 
 B)False

Question 14

The First Chance Casino has gambling facilities,a bar,a restaurant,and a hotel.All employees are allowed to obtain food from the restaurant at no charge during working hours.In the case of the employees who operate the gambling facilities,bar,and restaurant,60% of all of Casino's employees,the meals are provided for the convenience of the Casino.However,the hotel workers,demanded equal treatment and therefore were also allowed to eat in the restaurant at no charge while they are at work.Which of the following is correct?

Accepted Answer

A)   All the employees are required to include the value of the meals in their gross income.
B)   Only the restaurant employees may exclude the value of their meals from gross income.
C)   Only the employees who work in gambling,the bar,and the restaurant may exclude the meals from gross income.
D)   All of the employees may exclude the value of the meals from gross income.
E)   None of these.F) A) and C)
G) C) and D)

Question 15

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Accepted Answer

These taxes,commonly referred to as "pay...

Question 16

Louise works in a foreign branch of her employer's business.She earned $5,000 per month throughout the relevant period.Which of the following is correct:

Accepted Answer

A)   If Louise worked in the foreign branch from May 1,2014 until October 31,2015,she may exclude $40,000 from gross income in 2014 and exclude $50,000 in 2015.
B)   If Louise worked in the foreign branch from May 1,2014 until October 31,2015,she cannot exclude anything from gross income because she was not present in the country for 330 days in either year.
C)   If Louise began work in the foreign country on May 1,2014,she must work through November 30,2015 in order to exclude $55,000 from gross income in 2015 but none in 2014.
D)   Louise will not be allowed to exclude any foreign earned income because she made less than $100,800.
E)   None of these.F) B) and C)
G) C) and E)

Question 17

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Accepted Answer

A) True 
 B)False

Question 18

Generally,a U.S.citizen is required to include in gross income the salary and wages earned while working in a foreign country even if the foreign country taxes the income.

Accepted Answer

A) True 
 B)False

Question 19

Kristen's employer owns its building and provides parking space for its employees.The value of the free parking is $150 per month.Karen's employer does not have parking facilities,but reimburses its employee for the cost of parking in a nearby garage,up to $150 per month.

Accepted Answer

A)   Kristen and Karen must recognize gross income from the parking services.
B)   Kristen can exclude the employer provided parking from gross income,but Karen must include her reimbursement in gross income.
C)   Kristen must include the value of the employer provided parking from her gross income,but Karen can exclude her reimbursement from gross income.
D)   Neither Kristen nor Karen is required to include the cost of parking in gross income.
E)   None of these.F) A) and E)
G) A) and D)

Question 20

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Accepted Answer

A)   $0
B)   $131,244
C)   $244,756
D)   $376,000
E)   None of the aboveF) B) and D)
G) B) and E)

Exam 11: Individuals As Employees and Proprietors

Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.

Correct Answer
verified

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Correct Answer
verified

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Correct Answer
verified

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Correct Answer
verified
These taxes,commonly referred to as "pay...
View Answer

Only self-employed individuals are required to make estimated tax payments.

Correct Answer
verified

Generally,a U.S.citizen is required to include in gross income the salary and wages earned while working in a foreign country even if the foreign country taxes the income.

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

Madison is an instructor of fine arts at a local community college.If she spends $600 (not reimbursed)on art supplies for her classes,$250 of this amount can be claimed as a deduction for AGI.

Correct Answer
verified

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

Correct Answer
verified

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

Correct Answer
verified
Jacob has no commuting expense...
View Answer

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Louise works in a foreign branch of her employer's business.She earned $5,000 per month throughout the relevant period.Which of the following is correct:

Correct Answer
verified

In May 2015,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2015 any deduction for moving expenses he may have claimed on his 2014 tax return.

Correct Answer
verified

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

Correct Answer
verified

Kristen's employer owns its building and provides parking space for its employees.The value of the free parking is $150 per month.Karen's employer does not have parking facilities,but reimburses its employee for the cost of parking in a nearby garage,up to $150 per month.

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.

Correct AnswerverifiedShow Answer

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Correct AnswerverifiedShow Answer

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Correct AnswerverifiedShow Answer

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Correct AnswerverifiedThese taxes,commonly referred to as "pay...View AnswerShow Answer

Only self-employed individuals are required to make estimated tax payments.

Correct AnswerverifiedShow Answer

Generally,a U.S.citizen is required to include in gross income the salary and wages earned while working in a foreign country even if the foreign country taxes the income.

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

Madison is an instructor of fine arts at a local community college.If she spends $600 (not reimbursed)on art supplies for her classes,$250 of this amount can be claimed as a deduction for AGI.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

Correct AnswerverifiedJacob has no commuting expense...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Louise works in a foreign branch of her employer's business.She earned $5,000 per month throughout the relevant period.Which of the following is correct:

Correct AnswerverifiedShow Answer

In May 2015,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2015 any deduction for moving expenses he may have claimed on his 2014 tax return.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Kristen's employer owns its building and provides parking space for its employees.The value of the free parking is $150 per month.Karen's employer does not have parking facilities,but reimburses its employee for the cost of parking in a nearby garage,up to $150 per month.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
These taxes,commonly referred to as "pay...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Jacob has no commuting expense...
View Answer

Correct Answer
verified

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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