Exam 9: Deductions: Employee and Self-Employed-Related Expenses

On their birthdays, Lily sends gift certificates each valued at $25) to Caden a key client) and to each of Caden's two minor children. Lily can deduct only $25 as to these gifts.

For tax year 2018, Taylor used the simplified method of determining her office in the home deduction. For 2019, Taylor must continue to use the simplified method and cannot switch to the regular actual expense) method.

Under the actual expense method, which, if any, of the following expenses will not be allowed?

When using the automatic mileage method, which, if any, of the following expenses also can be claimed?

Which of the following would constitute an employer-employee relationship?

Mallard Corporation pays for a trip to Aruba for its two top salespersons. This expense is subject to the overall limitation 50%).

Janet works at Green Company's call center. If Janet's compensation is based on the number of calls she handles, she is an independent contractor.

Code § 199A permits an individual to deduct 25 percent of the qualified business income generated through a sole proprietorship, a partnership, or an S corporation.

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.

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

In 2018, a taxpayer takes six clients to an NBA playoff game. If all of the tickets list price of $120 each) are purchased on the Internet for $1,800 $300 each), only $60 $120 × 50% overall limitation) per ticket is deductible.

Which, if any, of the following is subject to an overall limitation on meals in 2018?

Under the automatic mileage method, depreciation is not taken into account in the mileage rate allowed.

Madison is an instructor of fine arts at a local community college. If she spends $600 not reimbursed) on art supplies for her classes, $250 of this amount can be claimed as a deduction for AGI.

Under the regular actual expense) method, the portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business and two days are spent on visiting relatives, only 60% of the airfare is deductible.

Logan, Caden, and Olivia are three unrelated parties who claim the standard deduction. All are married and attend Citron University and each pays tuition of $6,100. Of this payment, Logan can claim a deduction of $4,000; Caden a deduction of $2,000; and Olivia no deduction at all. Explain.

If an individual is subject to the direction or control of another only to the extent of the end result but not as to the means of accomplishment, an employer-employee relationship does not exist.

Qualified business income QBI) is defined as the ordinary income less ordinary deductions a taxpayer earns from a "qualified trade or business"

The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.