Question 1

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

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 L)
N) E) and H)

Question 2

Meg teaches the fifth grade at a local school.During the year, she spends $1,200 for school supplies for use in her classroom.On her income tax return, some of this expense is not reported and the balance is deducted in two different places.Explain what has probably happened.

Accepted Answer

Meg probably has been reimbursed for som...

Question 3

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan.His modified AGI is $55,000 in 2017.The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

Accepted Answer

A)  $2,800.
B)  $3,500.
C)  $5,000.
D)  $5,500.
E)  None of the above.F) B) and C)
G) None of the above

Question 4

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $122,000.What amount, if any, may Dana contribute to a Roth IRA in 2017?

Accepted Answer

A)  $0.
B)  $3,225.
C)  $4,033.
D)  $5,500.
E)  None of the aboveF) D) and E)
G) None of the above

Question 5

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 6

Match the statements that relate to each other.(Note: Choice L may be used more than once.) 
-Automatic mileage method

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 J)
N) B) and F)

Question 7

In May 2017, after 11 months on a new job, Ken is fired after he assaults a customer.Ken must include in his gross income for 2017 any deduction for moving expenses he may have claimed on his 2016 tax return.

Accepted Answer

A) True 
 B)False

Question 8

Margaret is trying to decide whether to place funds in a qualified tuition program.Her son will be attending college in 4 years.She is in the 35% marginal tax bracket and she believes she can earn an 7% before tax return on alternative investments.Thus, $10,000 will accumulate to $11,948 (after-tax) in 4 years.Margaret expects tuition to increase at the rate of 5% each year to $12,155 in 4 years.Her son will be in the 15% marginal tax bracket in all relevant years.Given these assumptions, should Margaret participate in the qualified tuition program?

Accepted Answer

Margaret can accumulate $11,948 by inves...

Question 9

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 10

Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Accepted Answer

A) True 
 B)False

Question 11

Which, if any, of the following factors is not a characteristic of independent contractor status?

Accepted Answer

A)  Work-related expenses are reported on Form 2106.
B)  Receipt of a Form 1099 reporting payments received.
C)  Workplace fringe benefits are not available.
D)  Services are performed for more than one party.
E)  None of these.F) A) and E)
G) B) and E)

Question 12

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 E)
G) A) and C)

Question 13

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 14

Match the statements that relate to each other.(Note: Choice L may be used more than once.) 
-Club dues not deductible

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) C) and J)
N) F) and I)

Question 15

The employees of Mauve Accounting Services are permitted to use the copy machine for personal purposes, provided the privilege is not abused.Ed is the president of a civic organization and uses the copier to make several copies of the organization's agenda for its meetings.The copies made during the year would have cost $150 at a local office supply.

Accepted Answer

A)  Ed must include $150 in his gross income.
B)  Ed may exclude the cost of the copies as a no-additional cost fringe benefit.
C)  Ed may exclude the cost of the copies only if the organization is a client of Mauve.
D)  Ed may exclude the cost of the copies as a de minimis fringe benefit.
E)  None of these.F) C) and D)
G) B) and E)

Question 16

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year.The supper money received:

Accepted Answer

A)  Must be included in the employee's gross income.
B)  Must be included in the employee's gross income if the employee does not spend it for supper.
C)  May be excluded from the employee's gross income as a "no-additional cost" fringe benefit.
D)  May be excluded from the employee's gross income as a de minimis fringe benefit.
E)  None of these.F) B) and D)
G) A) and B)

Question 17

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) None of the above
G) B) and E)

Question 18

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) C) and L)
N) G) and L)

Question 19

Mauve Company permits employees to occasionally use the copying machine for personal purposes.The copying machine is located in the office where the higher paid executives work, so they occasionally use the machine.However, the machine is not convenient for use by the lower paid warehouse employees and, thus, they never use the copier.The use of the copy machine may not be excluded from gross income because the benefit is discriminatory.

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.) 
-Education expense that is not deductible to maintain or improve existing skills

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 H)
N) F) and J)

Exam 11: Individuals As Employees and Proprietors

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
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Correct Answer
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Margaret can accumulate $11,948 by inves...
View Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Automatic mileage method

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

Correct Answer
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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
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Correct Answer
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Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Correct Answer
verified

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Club dues not deductible

Correct Answer
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Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Education expense that is not deductible to maintain or improve existing skills

Correct Answer
verified

Which, if any, of the following factors is not a characteristic of independent contractor status?

Correct Answer
verified

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year.The supper money received:

Correct Answer
verified

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan.His modified AGI is $55,000 in 2017.The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

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

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

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $122,000.What amount, if any, may Dana contribute to a Roth IRA in 2017?

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

Meg teaches the fifth grade at a local school.During the year, she spends $1,200 for school supplies for use in her classroom.On her income tax return, some of this expense is not reported and the balance is deducted in two different places.Explain what has probably happened.

Correct Answer
verified
Meg probably has been reimbursed for som...
View Answer

In May 2017, after 11 months on a new job, Ken is fired after he assaults a customer.Ken must include in his gross income for 2017 any deduction for moving expenses he may have claimed on his 2016 tax return.

Correct Answer
verified

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

Exam 11: Individuals As Employees and Proprietors

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 AnswerverifiedMargaret can accumulate $11,948 by inves...View AnswerShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Automatic mileage method

Correct AnswerverifiedShow Answer

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

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 AnswerverifiedShow Answer

Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Club dues not deductible

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once.) -Education expense that is not deductible to maintain or improve existing skills

Correct AnswerverifiedShow Answer

Which, if any, of the following factors is not a characteristic of independent contractor status?

Correct AnswerverifiedShow Answer

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year.The supper money received:

Correct AnswerverifiedShow Answer

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan.His modified AGI is $55,000 in 2017.The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

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

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

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $122,000.What amount, if any, may Dana contribute to a Roth IRA in 2017?

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

Meg teaches the fifth grade at a local school.During the year, she spends $1,200 for school supplies for use in her classroom.On her income tax return, some of this expense is not reported and the balance is deducted in two different places.Explain what has probably happened.

Correct AnswerverifiedMeg probably has been reimbursed for som...View AnswerShow Answer

In May 2017, after 11 months on a new job, Ken is fired after he assaults a customer.Ken must include in his gross income for 2017 any deduction for moving expenses he may have claimed on his 2016 tax return.

Correct AnswerverifiedShow Answer

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

Correct Answer
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Correct Answer
verified
Margaret can accumulate $11,948 by inves...
View Answer

Correct Answer
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Correct Answer
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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
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
verified
Meg probably has been reimbursed for som...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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