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Jean's employer has an accountable plan for reimbursing

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Jean's employer has an accountable plan for reimbursing employee expenses. jean is reimbursed for $1500 of business travel and $500 for various business subscriptions and professional dues. The $2000 reimbursement should be treated as follows;a. $2000 of income to Jean should be reported;b. Income to Jean and a corresponding miscellaneous deduction for Jean, subject to the 2% for AGI floor;c. No taxable income should be reported to Jean;d. $500 of income should be reported to Jean;22. Martin has a home office for his business as an agent for rock-and-roll bands The business shows a loss of $2000 before home office expenses. How should the home office expenses be treated?;a. because of the business loss, home office expenses can not be deducted and are lost forever;b. because of the business loss, home office expenses can not be deducted in the current year but can be carried forward to the next year.;c. the home office expenses increase the business loss in the year they are incurred and are fully deductible in that year;d. the home office expenses increase the business loss in the year they are incurred and are 50% deductible in that year.;23. In the current year, Johnice started a profitable bookkeeping business as a sole proprietor. Johnice made $38,000 in her first year of operation. What two forms must Johnice file for her business?;a. schedules a and c;b. schedule d and e;c. schedule se and c;d. schedules b and c;e. none of the above;24. Which of the following is not deductible as a moving expense?;a. the cost of moving household goods.;b. lodging for household members during the move.;c. the cost of a pre-move house-hunting trip.;d. travel expenses during the move.;e. all of the above are deductible as moving expenses.;25. Which of the following factors are considered by the IRS in evaluating whether an activity is classified a s a business or a hobby?;a. The expertise of the taxpayer.;b. the time and effort expended by the taxpayer;c. financial status of the taxpayer.;d. income and loss history from the activity;e. all of the above.;26. In determining whether an activity should be classified as a hobby, the tax law provides a rebuttable presumption with regard to the profits or losses of an activity. Which of the following statements describes the profit/loss test which must be satisfied in order to meet the presumption that the activity is not a hobby?;a. the activity shows a profit for 3 of the 5 previous years.;b. the activity shows a loss for 3 of the 5 previous years;c. the activity shows a profit for 3 of the 7 previous years.;d. the activity shows a loss for 3 of the 7 previous years.;e. none of the above.;27. Charles, a corporate executive, incurred business related, unreimbursed expenses in 2009 as follows;Entertainment $900;Transportation 700;Education 400;Assuming that charles itemized his deductions, how much of these expenses should he deduct on his 2009 schedule A (before the 2% of adjusted gross income limitation)?;a. 700;b. 1100;c. 1550;d. 2000;e. none of the above;28. Barry is a self-employed attorney who travels to New York on a business trip during 2009. Barry's expenses were as follows;Airfare $560;Taxis 40;Meals 100;Lodging 350;How much may Barry deduct as travel expenses for the trip?;a. 0;b. 950;c. 1000;d. 1050;e. none of the above;29. To fie a Schedule C-EZ, the taxpayer must;a. have gross receipts of $25000 or less form the business;b. have business expenses of 5000 or less;c. have inventory of less than 2000 during the year;d. have no more than 2 businesses;e. have no more than 5 employees during the year.;30. To be deductible as the cost of special work clothing or uniforms;a. the clothing must not be suitable for everyday use and must be required as a condition of employment;b. the clothing must be required as a condition of employment,but can also be suitable for everyday use;c. the clothing need not be required as a condition of employment, but must not be suitable for everyday use;d. only the cost of the clothing is included, upkeep is not deductible;31. Gary is a self-employed accountant who pays 2000 for business meals. How much of a deduction can he claim for the meals and where should the deduction be claimed?;a. 50% misc itemized deduction;b. 50% schedule C deduction;c. 100% miscellaneous itemized deduction;d. 100% schedule C deduction.;32. What income tax form does a self-employed sole proprietor usually use to report income and expense form business?;a. schedule c;b. schedule a misc itemized deductions;c. schedule b;d. form 2106 employee business expenses;e. none of the above;33. What income tax form does an employee use to report expenses that are not reimbursed by an employer under an accountable plan?;a. form 2106 employee business expenses;b. no form the expenses are not deductible to the employee;c. schedule d;d. schedule r;e. schedule c;34. Kendra is a self-employed taxpayer working exclusively from her home office. Before the home office deduction, Kendra has 5000 of net income. Her allocable home expenses are 10000 in total. How are the home office expenses treated on her current year tax return?;a. only 5000 home office expenses may be deducted resulting in net business income of 0. the extra 5000 of home office expenses may be carried forward and deducted in a future year against home office income;b. only 3000 a year of the home office expenses may be deducted;c. all home office expenses may be deducted resulting in a business loss of 5000;d. only 5000 of home office expenses may be deducted, resulting in a net business income of 0. none of the extra 5000 of home office expenses may be carried forward or deducted.;35. Mikey is a self-employed computer game software designer. He takes a week-long trip to Maui, primarily for business. He takes two personal days at the beach. How should he treat the expenses related to this trip?;a. none of the expenses are deductible since there was an element of personal enjoyment in the trip;b. 100% of the trip should be deducted as a business expense since the trip was primarily for business;c. 50% of the trip should be deducted as a business expense.;d. the cost of all of the airfare and the expenses related to the business days should be deducted, while the expenses related to the personal days are not deductible.

 

Paper#27268 | Written in 18-Jul-2015

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