Exam 18: Employee Expenses and Deferred Compensation

During 2014,Marcia,who is single and is covered under a pension plan at work,contributes $5,500 into a Roth IRA.If her AGI is $64,000,which of the following is true?

Discuss the tax treatment of a nonqualified stock option plan.

Jason,who lives in New Jersey,owns several apartment buildings in Baltimore.His travel expenses to Baltimore to inspect his property are tax deductible.

Daniel has accepted a new job and is reviewing the retirement plan information.He has a choice of participating in the company's conventional Sec.401(k)plan or a Roth 401(k)plan.Explain the difference between the two plans in terms of employee contributions and retirement distributions from the plan.

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

If the standard mileage rate is used in the first year,the actual expense method may not be used in future years.

Dues paid to social or athletic clubs are deductible if they meet a primary-use test,requiring that more than 50% of the use of the facility be for business purposes.

Hunter retired last year and will receive annuity payments for life from his employer's qualified retirement plan of $30,000 per year starting this year.During his years of employment,Hunter contributed $130,000 to the plan. Based on IRS tables,his life expectancy is 260 months.All of the contributions were on a pre-tax basis.This year,Hunter will include what amount in income?

Incremental expenses of an additional night's lodging and additional day's meals that are incurred to obtain "excursion" air fare rates with respect to employees whose business travel extends over Saturday night are not deductible business expenses.

If an individual is not "away from home," expenses related to local transportation are never deductible.

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

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

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.

Self-employed individuals receive a for AGI deduction for 50% of entertainment expenses paid or incurred in the trade or business.

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

In which of the following situations is the individual is an independent contractor rather than an employee?

Personal travel expenses are deductible as miscellaneous itemized deductions subject to the 2% of AGI floor.

Explain when educational expenses are deductible for an employee.

What two conditions are necessary for moving expenses to be deductible?

Nonqualified deferred compensation plans can discriminate in favor of highly compensated executives.