Question 1

Commuting to and from a job location is a deductible expense.

Accepted Answer

A) True 
 B)False

Question 2

In determining whether travel expenses are deductible,a general rule is that if a person is reassigned for an indefinite period,the individual's tax home shifts to the new location and travel expenses are not deductible.

Accepted Answer

A) True 
 B)False

Question 3

Travel expenses for a taxpayer's spouse are deductible if the spouse is an employee,the travel is for a bona fide purpose,and the expenses are otherwise deductible.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements regarding independent contractors and employees is true?

Accepted Answer

A) Independent contractors pay Social Security and Medicare tax of 15.3%. 
B) Employees must pay unemployment taxes. 
C) Independent contractors and employees pay the same Social Security and Medicare tax rates. 
D) Independent contractors deduct their business expenses "from AGI." 
A) Independent contractors pay Social Security and Medicare tax of 15.3%. 
B) Employees must pay unemployment taxes. 
C) Independent contractors and employees pay the same Social Security and Medicare tax rates. 
D) Independent contractors deduct their business expenses "from AGI."

Question 5

Discuss the tax treatment of a nonqualified stock option plan.

Accepted Answer

The tax treatment of a nonqualified stoc

Question 6

Hannah is a 52-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) $4,400 
B) $5,200 
C) $5,500 
D) $6,500 
A) $4,400 
B) $5,200 
C) $5,500 
D) $6,500

Question 7

During 2015,Marcia,who is single and is covered under a pension plan at work,contributes $5,500 into a Roth IRA.If her AGI is $65,000,which of the following is true?

Accepted Answer

A) All of the contribution is deductible. 
B) None of the contribution is deductible. 
C) She must withdraw all of the contribution immediately since she is covered under a plan at work. 
D) Only 60% of the contribution is deductible since her AGI exceeds $61,000 by $4,000 and her maximum contribution is phased out by 40%. 
A) All of the contribution is deductible. 
B) None of the contribution is deductible. 
C) She must withdraw all of the contribution immediately since she is covered under a plan at work. 
D) Only 60% of the contribution is deductible since her AGI exceeds $61,000 by $4,000 and her maximum contribution is phased out by 40%.

Question 8

All of the following characteristics are true of an incentive stock option with the exception of:

Accepted Answer

A) the option price must be equal to or greater than the stock's FMV on the option's grant date. 
B) the employee cannot own more than ten percent of the voting power of the employer corporation's stock immediately prior to the option's grant date. 
C) the option must be granted within ten years from the date the plan is adopted and the employee must exercise the stock option within ten years from the grant date. 
D) there is no limit to the value of the options that become exercisable to an employee in a single year. 
A) the option price must be equal to or greater than the stock's FMV on the option's grant date. 
B) the employee cannot own more than ten percent of the voting power of the employer corporation's stock immediately prior to the option's grant date. 
C) the option must be granted within ten years from the date the plan is adopted and the employee must exercise the stock option within ten years from the grant date. 
D) there is no limit to the value of the options that become exercisable to an employee in a single year.

Question 9

Which of the following statements regarding Coverdell Education Savings Accounts is incorrect,disregarding any AGI limits?

Accepted Answer

A) Distributions cannot be used for elementary and secondary education expenses. 
B) Distributions to the beneficiary are not taxable as long as they are used for tuition,fees,room and board. 
C) Contributions can be made until the beneficiary reaches 18. 
D) Contributors can make nondeductible contributions of up to $2,000 for each beneficiary. 
A) Distributions cannot be used for elementary and secondary education expenses. 
B) Distributions to the beneficiary are not taxable as long as they are used for tuition,fees,room and board. 
C) Contributions can be made until the beneficiary reaches 18. 
D) Contributors can make nondeductible contributions of up to $2,000 for each beneficiary.

Question 10

The deduction for unreimbursed transportation expenses for employees is subject to the 2% of AGI floor.

Accepted Answer

A) True 
 B)False

Question 11

In-home office expenses which are not deductible in the year in which the costs were incurred due to limitations may be carried forward to subsequent years.

Accepted Answer

A) True 
 B)False

Question 12

The maximum tax deductible contribution to a Roth IRA in 2015 is $5,500 ($6,500 for a taxpayer age 50 or over).

Accepted Answer

A) True 
 B)False

Question 13

A qualified pension plan requires that employer-provided benefits must be 100 percent vested after five years of service.

Accepted Answer

A) True 
 B)False

Question 14

What factors are considered in determining whether an expense is a deductible travel expense?

Accepted Answer

Factors to consider include: 1.Whether t

Question 15

In-home office expenses for an office used by the taxpayer for administrative or management activities of the taxpayer's trade or business are never deductible.

Accepted Answer

A) True 
 B)False

Question 16

West's adjusted gross income was $90,000.During the current year he incurred and paid the following:   None of the expenses were reimbursed.Assuming he can itemize deductions,how much should West claim as miscellaneous itemized deductions (after limitations have been applied)?

Accepted Answer

A) $2,700 
B) $4,500 
C) $3,500 
D) $5,300 
A) $2,700 
B) $4,500 
C) $3,500 
D) $5,300

Question 17

Which of the following conditions would generally not favor the rollover of an untaxed retirement fund (e.g.traditional IRA or 401(k)plan)to a Roth account?

Accepted Answer

A) expected higher tax rates at retirement 
B) significant after-tax funds available to pay taxes 
C) an advanced age of the taxpayer 
D) All of the above create favorable conditions for a rollover to a Roth. 
A) expected higher tax rates at retirement 
B) significant after-tax funds available to pay taxes 
C) an advanced age of the taxpayer 
D) All of the above create favorable conditions for a rollover to a Roth.

Question 18

All of the following are true with regard to a Roth IRA except

Accepted Answer

A) contributions to Roth IRAs are subject to special modified AGI limitations that are higher than those for traditional IRAs. 
B) contributions to Roth IRAs are never tax deductible. 
C) contributions to Roth IRAs must cease after the owner has reached age 70 1/2. 
D) contributions to existing Roth IRAs must be made by the due date of the return. 
A) contributions to Roth IRAs are subject to special modified AGI limitations that are higher than those for traditional IRAs. 
B) contributions to Roth IRAs are never tax deductible. 
C) contributions to Roth IRAs must cease after the owner has reached age 70 1/2. 
D) contributions to existing Roth IRAs must be made by the due date of the return.

Question 19

Jack takes a $7,000 distribution from his Health Savings Account.$2,000 is used to pay for X-rays and dental surgery.The other $5,000 to make a down payment on a new car.What are the tax consequences to Jack?

Accepted Answer

Jack will exclude the $2,000 distributio

Question 20

A sole proprietor establishes a Keogh plan.The highest effective percentage of earned income she can contribute is 25 percent.

Accepted Answer

A) True 
 B)False

Exam 18: Employee Expenses and Deferred Compensation

Commuting to and from a job location is a deductible expense.

In determining whether travel expenses are deductible,a general rule is that if a person is reassigned for an indefinite period,the individual's tax home shifts to the new location and travel expenses are not deductible.

Travel expenses for a taxpayer's spouse are deductible if the spouse is an employee,the travel is for a bona fide purpose,and the expenses are otherwise deductible.

Which of the following statements regarding independent contractors and employees is true?

Discuss the tax treatment of a nonqualified stock option plan.

Hannah is a 52-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?

During 2015,Marcia,who is single and is covered under a pension plan at work,contributes $5,500 into a Roth IRA.If her AGI is $65,000,which of the following is true?

All of the following characteristics are true of an incentive stock option with the exception of:

Which of the following statements regarding Coverdell Education Savings Accounts is incorrect,disregarding any AGI limits?

The deduction for unreimbursed transportation expenses for employees is subject to the 2% of AGI floor.

In-home office expenses which are not deductible in the year in which the costs were incurred due to limitations may be carried forward to subsequent years.

The maximum tax deductible contribution to a Roth IRA in 2015 is $5,500 ($6,500 for a taxpayer age 50 or over).

A qualified pension plan requires that employer-provided benefits must be 100 percent vested after five years of service.

What factors are considered in determining whether an expense is a deductible travel expense?

In-home office expenses for an office used by the taxpayer for administrative or management activities of the taxpayer's trade or business are never deductible.

West's adjusted gross income was $90,000.During the current year he incurred and paid the following: None of the expenses were reimbursed.Assuming he can itemize deductions,how much should West claim as miscellaneous itemized deductions (after limitations have been applied)?

Which of the following conditions would generally not favor the rollover of an untaxed retirement fund (e.g.traditional IRA or 401(k)plan)to a Roth account?

All of the following are true with regard to a Roth IRA except

Jack takes a $7,000 distribution from his Health Savings Account.$2,000 is used to pay for X-rays and dental surgery.The other $5,000 to make a down payment on a new car.What are the tax consequences to Jack?

A sole proprietor establishes a Keogh plan.The highest effective percentage of earned income she can contribute is 25 percent.

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