Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

In terms of income tax treatment, what is the difference between common law employees and statutory employees?

Accepted Answer

Although subject to Social Security tax,...

Question 3

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

Accepted Answer

A)   A plumber who comes to your home to fix a leaking faucet.
B)   A CPA who prepares a client's tax return.
C)   A physician who hires a nurse to help her with patient screening and preliminary tests in the office.
D)   A gardener who takes care of individual lawns for a monthly fee.
E)   None of these would constitute an employer-employee relationship.F) A) and B)
G) B) and E)

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Accepted Answer

Most likely Ashley is self-emp...

Question 7

Which of the following trips, if any, will qualify for the travel expense deduction?

Accepted Answer

A)   Dr. Jones, a self-employed general dentist, attends a two-day seminar on developing a dental practice.
B)   Dr. Brown, a self-employed surgeon, attends a two-day seminar on financial planning.
C)   Paul, a romance language high school teacher, spends summer break in France, Portugal, and Spain improving his language skills.
D)   Myrna went on a two-week vacation in Boston. While there, she visited her employer's home office to have lunch with former coworkers.
E)   All of these.F) C) and E)
G) D) and E)

Question 8

Which of the following, if any, is an advantage of using the simplified method for determining the office in the home deduction?

Accepted Answer

A)   No depreciation on the personal residence has to be computed.
B)   The exclusive use requirement does not have to be met.
C)   It allows the expense to be classified as a deduction for AGI.
D)   It can also be used for a residence that is rented (not owned)  by the taxpayer.
E)   None of these.F) B) and D)
G) B) and E)

Question 9

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Accepted Answer

A) True 
 B)False

Question 10

Lloyd, a practicing CPA, pays tuition to attend law school. Since a law degree involves education leading to a new trade or business, the tuition is not deductible.

Accepted Answer

A) True 
 B)False

Question 11

Jake performs services for Maude. If Maude provides a helper and tools, this is indicative of independent contractor
(rather than employee) status.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   Engine tune-up.
B)   Parking.
C)   Interest on automobile loan.
D)   MACRS depreciation.
E)   None of these.F) A) and D)
G) A) and C)

Question 13

The IRS will issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.

Accepted Answer

A) True 
 B)False

Question 14

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the
IRA upon retirement are fully taxed.

Accepted Answer

A) True 
 B)False

Question 15

A qualified trade or business includes any trade or business including providing services as an employee.

Accepted Answer

A) True 
 B)False

Question 16

The § 222 deduction for tuition and related expenses is available:

Accepted Answer

A)   Only if the taxpayer itemizes deductions from AGI.
B)   To deduct that portion of the tuition in excess of that allowed under the lifetime learning credit.
C)   To cover the tuition of a son who does not qualify as the taxpayer's dependent.
D)   Only if it is job related.
E)   None of these.F) B) and C)
G) D) and E)

Question 17

Which of the following expenses, if any, is/are deductible?

Accepted Answer

A)   Contribution to a Roth IRA.
B)   Costs involved in maintaining an office in the home by a self-employed insurance adjuster. Taxpayer's wife also uses the office as a meeting place for her bridge club.
C)   Cost of moving to first job location. Taxpayer just graduated from college.
D)   Job-hunting expenses of a fishing guide to become an insurance salesman.
E)   None of the above.F) All of the above
G) C) and E)

Question 18

Rebecca and Brad are married and will file jointly. Rebecca earns $300,000 from her single-member LLC (a law firm). She reports her business as a sole proprietorship. Wages paid by the law firm amount to $40,000? the law firm has no significant property. Brad is employed as a tax manager by a local CPA firm. Their modified taxable income is $381,400 (this is also their taxable income before the deduction for qualified business income). Determine their QBI deduction for 2019.

Accepted Answer

Normally, Rebecca and Brad would be enti...

Question 19

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Accepted Answer

A) True 
 B)False

Question 20

By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Accepted Answer

A) True 
 B)False

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

Lloyd, a practicing CPA, pays tuition to attend law school. Since a law degree involves education leading to a new trade or business, the tuition is not deductible.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following trips, if any, will qualify for the travel expense deduction?

Correct Answer
verified

By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Correct Answer
verified

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

Correct Answer
verified

Which of the following, if any, is an advantage of using the simplified method for determining the office in the home deduction?

Correct Answer
verified

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Correct Answer
verified
Most likely Ashley is self-emp...
View Answer

Jake performs services for Maude. If Maude provides a helper and tools, this is indicative of independent contractor (rather than employee) status.

Correct Answer
verified

Correct Answer
verified
Normally, Rebecca and Brad would be enti...
View Answer

The § 222 deduction for tuition and related expenses is available:

Correct Answer
verified

A qualified trade or business includes any trade or business including providing services as an employee.

Correct Answer
verified

In terms of income tax treatment, what is the difference between common law employees and statutory employees?

Correct Answer
verified
Although subject to Social Security tax,...
View Answer

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.

Correct Answer
verified

Which of the following expenses, if any, is/are deductible?

Correct Answer
verified

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Correct Answer
verified

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the IRA upon retirement are fully taxed.

Correct Answer
verified

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Correct Answer
verified

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

Correct Answer
verified

The IRS will issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.

Correct Answer
verified

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

Lloyd, a practicing CPA, pays tuition to attend law school. Since a law degree involves education leading to a new trade or business, the tuition is not deductible.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following trips, if any, will qualify for the travel expense deduction?

Correct AnswerverifiedShow Answer

By itself, credit card receipts will not constitute adequate substantiation for travel expenses.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following, if any, is an advantage of using the simplified method for determining the office in the home deduction?

Correct AnswerverifiedShow Answer

Ashley and Matthew are husband and wife and both are practicing CPAs. On a joint return, Ashley gets to deduct her professional dues but Matthew does not. Explain.

Correct AnswerverifiedMost likely Ashley is self-emp...View AnswerShow Answer

Jake performs services for Maude. If Maude provides a helper and tools, this is indicative of independent contractor (rather than employee) status.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNormally, Rebecca and Brad would be enti...View AnswerShow Answer

The § 222 deduction for tuition and related expenses is available:

Correct AnswerverifiedShow Answer

A qualified trade or business includes any trade or business including providing services as an employee.

Correct AnswerverifiedShow Answer

In terms of income tax treatment, what is the difference between common law employees and statutory employees?

Correct AnswerverifiedAlthough subject to Social Security tax,...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

Which of the following expenses, if any, is/are deductible?

Correct AnswerverifiedShow Answer

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

Correct AnswerverifiedShow Answer

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the IRA upon retirement are fully taxed.

Correct AnswerverifiedShow Answer

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The IRS will issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Most likely Ashley is self-emp...
View Answer

Correct Answer
verified

Correct Answer
verified
Normally, Rebecca and Brad would be enti...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Although subject to Social Security tax,...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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