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

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Question 31

Multiple Choice

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During the year, Oscar travels from Raleigh to Moscow (Russia) on business.His time was spent as follows: 2 days travel (one day each way) , 2 days business, and 2 days personal.His expenses for the trip were as follows (meals and lodging reflect only the business portion) : Presuming no reimbursement, Oscar's deductible expenses are:

A) $6,000.
B) $5,500.
C) $4,500.
D) $3,500.
E) None of the above.

F) B) and E)
G) A) and D)

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Question 32

True/False

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Qualified moving expenses include the cost of lodging but not meals during the move.

A) True
B) False

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Question 33

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Beth, age 51, has a traditional deductible IRA with an account balance of $221,419 of which $160,400 represents contributions and $61,019 represents earnings.In 2012, she converts her traditional IRA into a Roth IRA.What amount, if any, must Beth include in her gross income in 2012?

After the automatic mileage rate has been set by the IRS for a year, it can later be changed by the IRS.

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the smaller of $5,000 or the individual's compensation for the year.

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.

Tired of renting, Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire qualifies as a uniform expense.

When contributions are made to a Roth IRA, they are deductible by the participant.Later distributions from a the IRA, however, are fully taxed.

In the case of an office in the home deduction, the exclusive business use test does not apply when the home is used as a daycare center.

In contrasting the reporting procedures of employees and self-employed persons regarding job-related transactions, which of the following items involve self-employed?

The work-related expenses of an independent contractor will not be subject to the 2%-of-AGI floor.

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Frank, a recently retired FBI agent, pays job search expenses to obtain a position with a city police department.Frank's job search expenses do not qualify as deductions.

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

Tickets to a theater performance or sporting event can be treated as either business entertainment or a business gift if the taxpayer does not accompany the client to the event.

One of the tax advantages of being self-employed (rather than being an employee) is:

For tax purposes, a statutory employee is treated the same as a common law employee.

Christopher just purchased an automobile for $40,000 which he plans to claim 100% as being for business use.In order to take advantage of MACRS and § 179, he plans to use the actual cost method for determining his deduction in the first year.In subsequent years, he will switch to the automatic mileage method.Comment on Christopher's proposed approach.

Donna, age 27 and unmarried, is an active participant in a qualified retirement plan.Her AGI is $116,000.What amount, if any, may Donna contribute to a Roth IRA in 2012?

Ryan performs services for Jordan. Which, if any, of the following factors indicate that Ryan is an employee, rather than an independent contractor?