Question 1

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Accepted Answer

A) True 
 B)False

Question 2

A participant who is at least age 59 1/2 can make a tax-free qualified withdrawal from a Roth IRA after a five-year holding period.

Accepted Answer

A) True 
 B)False

Question 3

Roger is in the 35% marginal tax bracket. Roger's employer has created a flexible spending account for medical and dental expenses that are not covered by the company's health insurance plan. Roger had his salary reduced by $1,200 during the year for contributions to the flexible spending plan. However, Roger incurred only $1,100 in actual expenses for which he was reimbursed. Under the plan, he must forfeit the $100 unused amount. His after-tax cost of overfunding the plan is $65.

Accepted Answer

A) True 
 B)False

Question 4

During the year, John went from Milwaukee to Alaska on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are:
​

Presuming no reimbursement, deductible expenses are:

Accepted Answer

A)  $3,200.
B)  $3,900.
C)  $4,800.
D)  $5,500.
E)  None of these.F) B) and E)
G) None of the above

Question 5

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Job hunting expenses

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) D) and H)
N) C) and E)

Question 6

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) C) and E)
G) A) and E)

Question 7

Under the right circumstances, a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Accepted Answer

A) True 
 B)False

Question 8

Due to a merger, Allison transfers from Miami to Chicago. Under a new job description, she is reclassified from employee to independent contractor status. Her moving expenses, which are not reimbursed, are as follows:
​

Allison's deductible moving expense is:

Accepted Answer

A)  $0.
B)  $5,900.
C)  $6,100.
D)  $8,900.
E)  $9,300.F) A) and B)
G) B) and C)

Question 9

The exclusion for health insurance premiums paid by the employer applies to:

Accepted Answer

A)  Only current employees and their spouses.
B)  Only current employees and their spouses and dependents.
C)  Only current employees and their disabled spouses.
D)  Present employees, retired former employees, and their spouses and dependents.
E)  None of these.F) A) and E)
G) All of the above

Question 10

In connection with the office in the home deduction, comment on the following:
a.Mixed use (i.e., business and personal) of the portion of the home allocated to business.
b.The difference between direct and indirect expenses for deduction purposes.
c.The classification of the expense (i.e., dfor or dfrom AGI).

Accepted Answer

The answer of In connection with the office in the...

Question 11

Meredith holds two jobs and attends graduate school on weekends. The education improves her skills, but does not qualify her for a new trade of business. Before going to the second job, she returns home for dinner. Relevant mileage is as follows:
​
  
How much of the mileage qualifies for deduction purposes?

Accepted Answer

27 miles. The mileage from the first job...

Question 12

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-Sue has unreimbursed expenses.

Accepted Answer

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

Question 13

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

Accepted Answer

A) True 
 B)False

Question 14

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) All of the above
G) C) and E)

Question 15

Liam just graduated from college. Because it is his first job, the cost of moving his personal belongings from his parents' home to the job site does not qualify for the moving expense deduction.

Accepted Answer

A) True 
 B)False

Question 16

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Accepted Answer

A) True 
 B)False

Question 17

Peggy is an executive for the Tan Furniture Manufacturing Company. Peggy purchased furniture from the company for $9,500, 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 employees are 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:

Accepted Answer

A)  $0.
B)  $600.
C)  $3,500.
D)  $4,100.
E)  None of these.F) B) and E)
G) B) and C)

Question 18

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 19

If the cost of uniforms is deductible, their maintenance cost (e.g., laundry, dry cleaning, alterations) also is deductible.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 11: Individuals As Employees and Proprietors

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

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Correct Answer
verified

During the year, John went from Milwaukee to Alaska on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: Presuming no reimbursement, deductible expenses are:

Correct Answer
verified

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue has unreimbursed expenses.

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
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Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Job hunting expenses

Correct Answer
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Correct Answer
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27 miles. The mileage from the first job...
View Answer

Due to a merger, Allison transfers from Miami to Chicago. Under a new job description, she is reclassified from employee to independent contractor status. Her moving expenses, which are not reimbursed, are as follows: Allison's deductible moving expense is:

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) domestic travel.

Correct Answer
verified

Correct Answer
verified

If the cost of uniforms is deductible, their maintenance cost (e.g., laundry, dry cleaning, alterations) also is deductible.

Correct Answer
verified

Correct Answer
verified

Under the right circumstances, a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Correct Answer
verified

Correct Answer
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The exclusion for health insurance premiums paid by the employer applies to:

Correct Answer
verified

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Correct Answer
verified

Liam just graduated from college. Because it is his first job, the cost of moving his personal belongings from his parents' home to the job site does not qualify for the moving expense deduction.

Correct Answer
verified

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

Correct Answer
verified

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

Correct Answer
verified

A participant who is at least age 59 1/2 can make a tax-free qualified withdrawal from a Roth IRA after a five-year holding period.

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

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

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Correct AnswerverifiedShow Answer

During the year, John went from Milwaukee to Alaska on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: ​ Presuming no reimbursement, deductible expenses are:

Correct AnswerverifiedShow Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue has unreimbursed expenses.

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

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Job hunting expenses

Correct AnswerverifiedShow Answer

Correct Answerverified27 miles. The mileage from the first job...View AnswerShow Answer

Due to a merger, Allison transfers from Miami to Chicago. Under a new job description, she is reclassified from employee to independent contractor status. Her moving expenses, which are not reimbursed, are as follows: ​ Allison's deductible moving expense is:

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) domestic travel.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the cost of uniforms is deductible, their maintenance cost (e.g., laundry, dry cleaning, alterations) also is deductible.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the right circumstances, a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The exclusion for health insurance premiums paid by the employer applies to:

Correct AnswerverifiedShow Answer

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Correct AnswerverifiedShow Answer

Liam just graduated from college. Because it is his first job, the cost of moving his personal belongings from his parents' home to the job site does not qualify for the moving expense deduction.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

Correct AnswerverifiedShow Answer

A participant who is at least age 59 1/2 can make a tax-free qualified withdrawal from a Roth IRA after a five-year holding period.

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

During the year, John went from Milwaukee to Alaska on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: Presuming no reimbursement, deductible expenses are:

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
27 miles. The mileage from the first job...
View Answer

Due to a merger, Allison transfers from Miami to Chicago. Under a new job description, she is reclassified from employee to independent contractor status. Her moving expenses, which are not reimbursed, are as follows: Allison's deductible moving expense is:

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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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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