Question;1. S incurs $100 for business meals while traveling for his employer. S is reimbursed in full by the employer pursuant to an accountable plan after an accountable plan after an adequate accounting.The employer can deduct:a. $100 from AGIb. $100 for AGIc. $50 from AGId.$50 for AGI2. P traveled to San Francisco for four days on vacation, and while there spent another two days conducting business for his employer. P's plans fare for the trip was $350, meals cost $45 per day, hotels cost $95 per day. P was not reimbursed by his employer for any expenses. P has no other miscellaneous itemized deductions. P's AGI for the year is $25,000. P may deduct after all applicable limits:a.$0b.$195c.$240d.3453. Which of the following is the least accurate about substantiating entertainment expenses under I.R.C Section 274?a. The taxpayer must substantiate business relationship of the entertainmentb. The same type of substantiation is required as other expense.c. Taxpayer must substantiate the business purpose of the entertainment.d. All of the above are accurate.4. A home office deduction can be claimed under all of the following circumstances where it is used regularly and exclusively except:a. Where the home office is used as the principal place of business for any trade or business.b. Where the home office is used a place for meeting with patients, clients or customers in the ordinary course of business.c. Where the home office is used for a trade or business and conducted in a separate structure apart from the residence.d. All of the above can support a home office deduction.5.M moved into his house six years ago paying $150,000. M has used it as his principal residence for the entire period and he is the sole owner. M files a single Federal income tax return. During the current year M sold his house for $240,000. M moved into an apartment in the same year and did not buy another house. Which of the following is the most accurate?a.M has a $10,000 loss recognizedb. M has a $90,000 gain recognized because he didnt replace his principal residence after salec. M has no gain or loss recognized because he meets the ownership and use tests.d. M has a $150,000 loss.6. On June1, 2011, Jason, who is single, bought a home that he owned and used as his principal residence until he sold it on June1, 2012. The sale price was $1,500,000. His adjusted basis is $1,300,000. He moved from that residence to a new residence 500 miles away because his employer transferred him. He continued to work at the new location for over three years and the transfer constitutes a change of employment under Section 121. He has never sold another residence. How much gain must Jason recognized?a. $200,000b. $100,000c. 75,000d. $07. B has owned and lived in her house for over 20 years and she only owns one residence. She has never sold a residence. B is a single Filer, is retired and in good health. In the last five years B has spent four months each year in Florida renting a condo. During the current year, B sold her house for a $180,000 gain. Which of the following is most accurate?a. No gain is recognized because B's trip to Florida were temporary absences and the entire gain is excluded.b. $180,000 is recognized because B was absent from her principal residence 4 months of each of the last five years.c. $60,000 is recognized because B was absent from principal resident on-third of each of the last five years.d. None of the above are accurate.8. C transferred his principal residence to his trust (a grantor trust) for nontax estate administration purposes. He has always lived in the home as his principal residence. C is retired and in good health. Ten years after this transfer he sold his house for a $100,000 gain. C is a single taxpayer who has never sold a house before. Which of the following is the most accurate?a. C must recognized $100,000 of gain since he fails the ownership test.b. C must recognize $100,00 of gain because he fails both the use and ownership test.c. C has no gain to recognize because he is treated as the owner under the grantor trust exception.d. C has no gain to recognize because personal use gain are never taxed.9. B has owned and lived in his house for over 20 years and he only owns one residence. He has never sold a residence. B is a single filer and has properly used a portion of his home for a home office. Over this period B claimed $14,000 of depreciation deductions relating to his home office. During the current B sold his house for a $200,000 gain. Which of the following is most accurate?a. $14,000 of the gain is recognized because the depreciation is not eligible for the home exclusion.b. $200,000 is recognized because B's business use of his home causes the character of the gain to be business and not eligible for the home sale exclusion.c. No gain is recognized because B meets all tests for exclusion of gain on a home sale.d. $236,000 of gain is recognized.10. M and D have used their home as their principal residence for the last 20 years. They have not sold a home during this time period. M has owned the house in his name only for all of this time period. During the current year they sold the home for $350,000 gain. Which of the following is most accurate?a. $350,000 of gain is recognized because they do not both meet the ownership test.b. No gain is recognized because the gain is less than the $500,000 exclusion.c. $100,000 of gain is recognized because only Mark meets the ownership test.d. $50,000 of the gain is recognized because only 60% of the exclusion is available.
Paper#41704 | Written in 18-Jul-2015Price : $22