Question 1

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Accepted Answer

A)  Employees are not subject to the estimated tax payment provisions.
B)  Any penalty imposed for underpayment is deductible for income tax purposes.
C)  Married taxpayers may not make joint estimated tax payments unless they file a joint income tax return.
D)  No quarterly payments are required if the taxpayer's estimated tax is under $1,000.E) None of the above
F) C) and D)

Question 2

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

Accepted Answer

A)  The taxpayer's new job location must be at least 50 miles away from the old job.
B)  The taxpayer's new residence must be at least 50 miles away from the new job.
C)  The taxpayer's new residence must be at least 50 miles away from the old residence.
D)  The taxpayer's new job location must be at least 50 miles farther from the old residence than the old residence was to the old job.
E)  None of these.F) A) and E)
G) A) and D)

Question 3

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Cutback adjustment does not apply

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 I)
N) C) and J)

Question 4

During the year, Walt travels from Seattle to Tokyo (Japan)  on business. His time was spent as follows: 2 days travel (one day each way) , 2 days business, and 2 days personal. His expenses for the trip were as follows (meals and lodging reflect only the business portion) :
​

Presuming no reimbursement, Walt's deductible expenses are:

Accepted Answer

A)  $3,500.
B)  $4,500.
C)  $5,500.
D)  $6,000.
E)  None of these.F) A) and B)
G) None of the above

Question 5

Sick of her 65 mile daily commute, Edna purchases a condo that is only four miles from her job. Edna's moving expenses to her new condo are not allowed and cannot be claimed by her as a deduction.

Accepted Answer

A) True 
 B)False

Question 6

For tax year 2015, Taylor used the simplified method of determining her office in the home deduction. For 2016, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Accepted Answer

A) True 
 B)False

Question 7

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

The answer of Travel status requires that the taxpayer be...

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

The Royal Motor Company manufactures automobiles. Non-management employees of the company can buy a new automobile for Royal's cost plus 2%. The automobiles are sold to dealers at cost plus 20%. Generally, management employees of Local Dealer, Inc., are allowed to buy a new automobile from the company at the dealer's cost. Which of the following statements is correct?

Accepted Answer

A)  The non-management employees who buy automobiles at a discount are not required to recognize income from the purchase.
B)  None of the employees who take advantage of the fringe benefits described above are required to recognize income.
C)  Employees of Royal are required to recognize as gross income 18% (20% - 2%)  of the cost of the automobile purchased.
D)  All of these.
E)  None of these.F) B) and E)
G) A) and E)

Question 10

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 J)
N) B) and J)

Question 11

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 these.F) C) and D)
G) All of the above

Question 12

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows.
​

Aaron's deductible mileage for each workday is:

Accepted Answer

A)  10 miles.
B)  12 miles.
C)  20 miles.
D)  22 miles.
E)  32 miles.F) A) and B)
G) A) and C)

Question 13

Travis holds rights to a skybox (containing 10 seats) at Memorial Stadium which he uses to entertain key clients. At one sporting event, he took only six clients since three were ill. Even so, Travis may still deduct the appropriate cost of all ten seats.

Accepted Answer

A) True 
 B)False

Question 14

Tired of renting, Dr. Smith buys the academic robes she will wear at her college's graduation procession. The cost of this attire does not qualify as a uniform expense.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Jackson gives his supervisor and her husband each a $30 box of chocolates at Christmas. Jackson may claim only $25 as a deduction.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees. After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Accepted Answer

A) True 
 B)False

Question 19

Fresh Bakery often has unsold donuts at the end of the day. The bakery allows employees to take the leftovers home. The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Accepted Answer

A) True 
 B)False

Question 20

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:
​
  
Since Bo worked just part of the year, her salary was only $32,100. In terms of deductions from AGI, how much does Bo have?

Accepted Answer

$770. AGI is $30,000 [$32,100 (salary) -...

Exam 11: Individuals As Employees and Proprietors

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: Since Bo worked just part of the year, her salary was only $32,100. In terms of deductions from AGI, how much does Bo have?

Correct Answer
verified
$770. AGI is $30,000 [$32,100 (salary) -...
View Answer

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

Correct Answer
verified

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows. Aaron's deductible mileage for each workday is:

Correct Answer
verified

Jackson gives his supervisor and her husband each a $30 box of chocolates at Christmas. Jackson may claim only $25 as a deduction.

Correct Answer
verified

Fresh Bakery often has unsold donuts at the end of the day. The bakery allows employees to take the leftovers home. The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Correct Answer
verified

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

Correct Answer
verified

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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Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment does not apply

Correct Answer
verified

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
verified

Sick of her 65 mile daily commute, Edna purchases a condo that is only four miles from her job. Edna's moving expenses to her new condo are not allowed and cannot be claimed by her as a deduction.

Correct Answer
verified

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees. After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Correct Answer
verified

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

Correct Answer
verified

Travis holds rights to a skybox (containing 10 seats) at Memorial Stadium which he uses to entertain key clients. At one sporting event, he took only six clients since three were ill. Even so, Travis may still deduct the appropriate cost of all ten seats.

Correct Answer
verified

Tired of renting, Dr. Smith buys the academic robes she will wear at her college's graduation procession. The cost of this attire does not qualify as a uniform expense.

Correct Answer
verified

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.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Correct Answer
verified

Correct Answer
verified

For tax year 2015, Taylor used the simplified method of determining her office in the home deduction. For 2016, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

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: ​ Since Bo worked just part of the year, her salary was only $32,100. In terms of deductions from AGI, how much does Bo have?

Correct Answerverified$770. AGI is $30,000 [$32,100 (salary) -...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows. ​ Aaron's deductible mileage for each workday is:

Correct AnswerverifiedShow Answer

Jackson gives his supervisor and her husband each a $30 box of chocolates at Christmas. Jackson may claim only $25 as a deduction.

Correct AnswerverifiedShow Answer

Fresh Bakery often has unsold donuts at the end of the day. The bakery allows employees to take the leftovers home. The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Correct AnswerverifiedShow Answer

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

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 AnswerverifiedShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment does not apply

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

Sick of her 65 mile daily commute, Edna purchases a condo that is only four miles from her job. Edna's moving expenses to her new condo are not allowed and cannot be claimed by her as a deduction.

Correct AnswerverifiedShow Answer

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees. After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Travis holds rights to a skybox (containing 10 seats) at Memorial Stadium which he uses to entertain key clients. At one sporting event, he took only six clients since three were ill. Even so, Travis may still deduct the appropriate cost of all ten seats.

Correct AnswerverifiedShow Answer

Tired of renting, Dr. Smith buys the academic robes she will wear at her college's graduation procession. The cost of this attire does not qualify as a uniform expense.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For tax year 2015, Taylor used the simplified method of determining her office in the home deduction. For 2016, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Correct AnswerverifiedShow Answer

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: Since Bo worked just part of the year, her salary was only $32,100. In terms of deductions from AGI, how much does Bo have?

Correct Answer
verified
$770. AGI is $30,000 [$32,100 (salary) -...
View Answer

Correct Answer
verified

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows. Aaron's deductible mileage for each workday is:

Correct Answer
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