In which, if any, of the following situations is the automatic mileage available?
| 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 three cars used to deliver pizzas. | |
| d. | MACRS statutory percentage method has been claimed on the automobile. | |
| e. | None of these. |
Peggy is an executive for the Tan Furniture Manufacturing Company. Peggy purchased furniture from the company for $9,000, the price Tan ordinarily would charge a wholesaler for the same items. The retail price of the furniture was $12,500, and Tan?s cost was $9,000. The company also paid for Peggy?s parking space in a garage near the office. The parking fee was $600 for the year. All other employees are not allowed to buy furniture at a discounted price comparable to that charged to Peggy. However, the company does not pay other employees? parking fees. Peggy?s gross income from the above is:
| a. | $0. | |
| b. | $600. | |
| c. | $3,500. | |
| d. | $4,100. | |
| e. | None of these. |
Amy works as an auditor for a large major CPA firm. During the months of September through November of each year, she is permanently assigned to the team auditing Garnet Corporation. As a result, every day she drives from her home to Garnet and returns home after work. Mileage is as follows:
| Miles | |
| Home to office | 10 |
| Home to Garnet | 15 |
| Office to Garnet | 35 |
For these three months, Amy?s deductible mileage for each workday is:
| a. | 0. | |
| b. | 30. | |
| c. | 35. | |
| d. | 60. | |
| e. | 70. |
An employee can exclude from gross income the value of meals provided by his or her employer whenever:
| a. | The meal is not extravagant. | |
| b. | The meals are provided on the employer?s premises for the employee?s convenience. | |
| c. | There are no places to eat near the work location. | |
| d. | The meals are provided to limit the time the employees are away from their work during the busy hour for the convenience of the employer. | |
| e. | None of these. |
The Perfection Tax Service gives employees $12.50 as ?supper money? when they are required to work overtime, approximately 25 days each year. Which statement is incorrect?
| a. | The supper money must be included in the employee?s gross income since they received cash. | |
| b. | The employees may treat the supper money as de minimis fringe benefit. | |
| c. | The super money is so small and it may meet the a de minimis fringe benefit. May be excluded from the employee?s gross income as a ?no-additional cost? fringe benefit. | |
| d. | The super money may be excluded from the employee?s gross income as a de minimis fringe benefit. | |
| e. | All of these above statements are correct. |
Susan was recently employed by an accounting firm. During the year, she spends $2,500 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books. Assuming no reimbursement, how much can Susan deduct for the law school expenses?
| a. | $4,000 | |
| b. | $450 | |
| c. | $4,200 | |
| d. | $0 | |
| e. | None of these |
The major advantage of being an independent contractor is that job-related expenses are classified as deductions from AGI. Thus, they are reported on Schedule C rather than on Schedule A.
True
False
Robert entertains several of his key clients on January 1 of the current year. Expenses paid by Robert are as follows:
| Cab fare | $ 160 |
| Cover charge at supper club | 200 |
| Dinner at club | 800 |
| Tips to waiter | 160 |
Presuming proper substantiation, Robert?s deduction is:
| a. | $610. | |
| b. | $640. | |
| c. | $740. | |
| d. | $1,220. | |
| e. | None of these. |
A worker may prefer to be treated as an independent contractor (rather than an employee) for which of the following reasons:
| a. | Avoids the cutback adjustment as to business meals. | |
| b. | All of the self-employment tax is deductible for income tax purposes. | |
| c. | Work-related expenses are not subject to the 2%-of-AGI floor. | |
| d. | A Schedule C does not have to be filed. | |
| e. | None of these. |
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 incorrect?
| 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, the foreign earned income exclusion applies. | |
| 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 be allowed to exclude any foreign earned income because she made less than $100,800 in 2015. | |
| e. | None of these. |
DATE
Question answered on Jul 22, 2018
PRICE: $20
Solution~000447734.zip (18.37 KB)
