Question 1

Educational expenses incurred by a CPA for courses necessary to meet continuing education requirements are fully deductible.

Accepted Answer

A) True 
 B)False  True

Question 2

When are home-office expenses deductible?

Accepted Answer

Office-in-home expenses are deductible if any of the following conditions is met: 1.The office is used exclusively on a regular basis as the principal place of business for any trade or business of the taxpayer.2.The office is used as a place for meeting or dealing with patients,clients,or customers in the normal course of business.3.The office is used for administrative or management activities of the trade or business,and there is no other fixed location where those activities are conducted.In addition to satisfying one of the above conditions,if the taxpayer is an employee,the home office must be for the convenience of the employer.

Question 3

According to the IRS,a person's tax home is the location of the family residence regardless of the location of the taxpayer's principal place of employment.

Accepted Answer

A) True 
 B)False  False

Question 4

A gift from an employee to his or her superior does not qualify as a business gift.

Accepted Answer

A) True 
 B)False

Question 5

Tyne is a 48-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan.Before IRA contributions,her AGI is $64,000 in 2015.What is the maximum amount she may contribute to a tax deductible IRA?

Accepted Answer

A) $ 0 
B) $4,400 
C) $5,500 
D) $6,500 
A) $ 0 
B) $4,400 
C) $5,500 
D) $6,500

Question 6

An accountant takes her client to a hockey game following a business meeting.Because it is a playoff game,and the tickets were purchased that day,a premium was paid.The deduction for the tickets is limited to 50% of the face value.

Accepted Answer

A) True 
 B)False

Question 7

Explain when educational expenses are deductible for an employee.

Accepted Answer

Educational expenses are deductible if t

Question 8

Unreimbursed employee business expenses are deductions for AGI.

Accepted Answer

A) True 
 B)False

Question 9

A partnership plans to set up a retirement plan to benefit the partners and the employees.All of the following retirement plans are appropriate except

Accepted Answer

A) an H.R.10 (Keogh)plan. 
B) a SEP IRA. 
C) a SIMPLE plan. 
D) a Solo 401(k). 
A) an H.R.10 (Keogh)plan. 
B) a SEP IRA. 
C) a SIMPLE plan. 
D) a Solo 401(k).

Question 10

Austin incurs $3,600 for business meals while traveling for his employer,Tex,Inc.Austin is reimbursed in full by Tex pursuant to an accountable plan.What amounts can Austin and Tex deduct?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2012.The option price was $150,and the FMV of the Martin stock was also $150 on the grant date.The option allowed Caroline to purchase 1,000 shares of Martin stock.The option itself does not have a readily ascertainable FMV.Caroline exercised the option on August 1,2015 when the stock's FMV was $250.Caroline sells the stock on September 5,2016 for $300 per share.Martin Corporation will be allowed a deduction of

Accepted Answer

A) $150,000 in 2012. 
B) $100,000 in 2015. 
C) $50,000 in 2016. 
D) $100,000 in 2015 and $50,000 in 2016. 
A) $150,000 in 2012. 
B) $100,000 in 2015. 
C) $50,000 in 2016. 
D) $100,000 in 2015 and $50,000 in 2016.

Question 12

Ron obtained a new job and moved from Houston to Washington.He incurred the following moving expenses:   Assuming Ron is eligible to deduct his moving expenses,what is the amount of the deduction?

Accepted Answer

A) $3,522 
B) $6,600 
C) $9,172 
D) $8,422 
A) $3,522 
B) $6,600 
C) $9,172 
D) $8,422

Question 13

An employer receives an immediate tax deduction for pension and profit-sharing contributions made on behalf of employees.

Accepted Answer

A) True 
 B)False

Question 14

Richard traveled from New Orleans to New York for both business and vacation.He spent 4 days conducting business and some days vacationing.He incurred the following expenses:   What is his miscellaneous itemized deduction (before the floor),assuming Richard is an employee and is not reimbursed,under the following two circumstances?
a.He spends three days on vacation,in addition to the business days.
b.He spends six days on vacation,in addition to the business days.

Accepted Answer

The answer of Richard traveled from New Orleans to New...

Question 15

Which of the following is true about future qualified distributions from a Roth IRA by a person who will be 65 years old at the time the distributions begin? Assume the individual opened the account before age 60.

Accepted Answer

A) The entire amount of the distributions will be tax-free. 
B) Only the accumulated earnings will be tax-free. 
C) Only the previous contributions will be tax-free. 
D) The entire amount of the distribution will be taxable. 
A) The entire amount of the distributions will be tax-free. 
B) Only the accumulated earnings will be tax-free. 
C) Only the previous contributions will be tax-free. 
D) The entire amount of the distribution will be taxable.

Question 16

Josiah is a human resources manager of a large software company.He is considering asking for a leave of absence to pursue an MBA degree.Josiah will pay for his MBA tuition of $45,000 a year without any employer assistance.Josiah will incur a large debt if he pursues an MBA.Upon completing his MBA,he would want to consider various job opportunities.Discuss the tax issues affecting Josiah's decision.

Accepted Answer

Josiah should consider whether the educa

Question 17

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Accepted Answer

A) True 
 B)False

Question 18

Assuming AGI below the threshold,a contributor may make a deductible contribution to a Coverdell Education Savings Account for a qualified designated beneficiary of up to $2,000.

Accepted Answer

A) True 
 B)False

Question 19

If an employee incurs travel expenditures and is fully reimbursed by the employer,neither the reimbursement nor the deduction is reported on the employee's tax return if reporting is pursuant to an accountable plan.

Accepted Answer

A) True 
 B)False

Question 20

Edward incurs the following moving expenses:   The employer reimburses Edward for the full $10,000.What is the amount to be reported as income by Edward?

Accepted Answer

A) $0 
B) $4,000 
C) $6,000 
D) $10,000 
A) $0 
B) $4,000 
C) $6,000 
D) $10,000

Exam 18: Employee Expenses and Deferred Compensation

Educational expenses incurred by a CPA for courses necessary to meet continuing education requirements are fully deductible.

When are home-office expenses deductible?

According to the IRS,a person's tax home is the location of the family residence regardless of the location of the taxpayer's principal place of employment.

A gift from an employee to his or her superior does not qualify as a business gift.

Tyne is a 48-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan.Before IRA contributions,her AGI is $64,000 in 2015.What is the maximum amount she may contribute to a tax deductible IRA?

An accountant takes her client to a hockey game following a business meeting.Because it is a playoff game,and the tickets were purchased that day,a premium was paid.The deduction for the tickets is limited to 50% of the face value.

Explain when educational expenses are deductible for an employee.

Unreimbursed employee business expenses are deductions for AGI.

A partnership plans to set up a retirement plan to benefit the partners and the employees.All of the following retirement plans are appropriate except

Austin incurs $3,600 for business meals while traveling for his employer,Tex,Inc.Austin is reimbursed in full by Tex pursuant to an accountable plan.What amounts can Austin and Tex deduct?

Ron obtained a new job and moved from Houston to Washington.He incurred the following moving expenses: Assuming Ron is eligible to deduct his moving expenses,what is the amount of the deduction?

An employer receives an immediate tax deduction for pension and profit-sharing contributions made on behalf of employees.

Which of the following is true about future qualified distributions from a Roth IRA by a person who will be 65 years old at the time the distributions begin? Assume the individual opened the account before age 60.

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Assuming AGI below the threshold,a contributor may make a deductible contribution to a Coverdell Education Savings Account for a qualified designated beneficiary of up to $2,000.

If an employee incurs travel expenditures and is fully reimbursed by the employer,neither the reimbursement nor the deduction is reported on the employee's tax return if reporting is pursuant to an accountable plan.

Edward incurs the following moving expenses: The employer reimburses Edward for the full $10,000.What is the amount to be reported as income by Edward?

Tax Research

an Introduction to Taxation

Corporate Formations and Capital Structure

Determination of Tax

The Corporate Income Tax

Gross Income: Inclusions

Corporate Nonliquidating Distributions

Gross Income: Exclusions

Other Corporate Tax Levies

Property Transactions: Capital Gains and Losses

Corporate Liquidating Distributions

Deductions and Losses

Corporate Acquisitions and Reorganizations

Itemized Deductions

Consolidated Tax Returns

Losses and Bad Debts

Partnership Formation and Operation

Special Partnership Issues

Depreciation,cost Recovery,amortization,and Depletion

Corporations

Accounting Periods and Methods

The Gift Tax

Property Transactions: Nontaxable Exchanges

The Estate Tax

Property Transactions: Section 1231 and Recapture

Income Taxation of Trusts and Estates

Special Tax Computation Methods,tax Credits,and Payment of Tax

Administrative Procedures

Filters