Question 1

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $55,000 in 2016. The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

Accepted Answer

A)  $2,800.
B)  $3,500.
C)  $5,000.
D)  $5,500.
E)  None of the above.F) A) and D)
G) A) and C)

Question 2

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Cutback adjustment applies

Accepted Answer

A)  Cover charge paid to entertain client at a night club.
B)  Deductible even if taxpayer does not take the new job
C)  Company picnic sponsored by employer
D)  Use of Federal per diem allowance to substantiate meals while in travel status
E)  Does not have to be job relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S. person who is employed overseas)  returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) B) and E)
N) I) and L)

Question 3

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip. While in Chicago, taxpayer uses the hotel valet service to have some laundry done. The valet charge is a nondeductible personal travel expense.

Accepted Answer

A) True 
 B)False

Question 4

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year. The supper money received:

Accepted Answer

A)  Must be included in the employee's gross income.
B)  Must be included in the employee's gross income if the employee does not spend it for supper.
C)  May be excluded from the employee's gross income as a "no-additional cost" fringe benefit.
D)  May be excluded from the employee's gross income as a de minimis fringe benefit.
E)  None of these.F) B) and D)
G) D) and E)

Question 5

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening. His expenses were as follows:
​
  
What is Alfredo's deductible expense for the trip?

Accepted Answer

$1,002 ($900 + $60 +...

Question 6

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?

Accepted Answer

A)  $0
B)  $131,244
C)  $244,756
D)  $376,000
E)  None of the aboveF) B) and D)
G) A) and E)

Question 7

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans. Their total AGI for 2016 is $120,000. Each is employed and earns a salary of $65,000. What are their combined deductible contributions to traditional IRAs?

Accepted Answer

A)  $0
B)  $3,000
C)  $4,000
D)  $8,000
E)  None of the aboveF) A) and D)
G) B) and C)

Question 8

Carla is a deputy sheriff. Her employer requires that she live in the county where she is employed. Housing is very expensive; so the county agreed to pay her $4,800 per year to cover the higher cost of housing. Carla must include the housing supplement in her gross income.

Accepted Answer

A) True 
 B)False

Question 9

If a married taxpayer is an active participant in another qualified retirement plan, the traditional IRA deduction phaseout begins at $98,000 of AGI for a joint return in 2016.

Accepted Answer

A) True 
 B)False

Question 10

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Nondeductible moving expense

Accepted Answer

A)  Must involve the same trade or business
B)  Must be for the convenience of the employer
C)  Meals while in route
D)  Lodging while in route
E)  Out-of-town job assignment lasts for more than one yearF) Can include actual cost of parkingG) Payment for services rendered based on tasks performedH) Excludes use of MACRS depreciationI) Taxpayer has tools and helper provided for himJ) Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeingK) Paralegal obtains a law degreeL) Correct match not providedM) E) and I)
N) B) and K)

Question 11

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Deductible job-hunting expenses

Accepted Answer

A)  Must involve the same trade or business
B)  Must be for the convenience of the employer
C)  Meals while in route
D)  Lodging while in route
E)  Out-of-town job assignment lasts for more than one yearF) Can include actual cost of parkingG) Payment for services rendered based on tasks performedH) Excludes use of MACRS depreciationI) Taxpayer has tools and helper provided for himJ) Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeingK) Paralegal obtains a law degreeL) Correct match not providedM) A) and B)
N) D) and L)

Question 12

A U.S. citizen who works in France from February 1, 2016 until January 31, 2017 is eligible for the foreign earned income exclusion in 2016 and 2017.

Accepted Answer

A) True 
 B)False

Question 13

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes. During 2016, his mileage was as follows:
​
  
How much can Rod claim for mileage?

Accepted Answer

$5,969 [(8,800 miles × $0.54, ...

Question 14

An individual, age 40, who is not subject to the phase-out provision may contribute a nondeductible amount to a Roth IRA up to $5,500 per year in 2016.

Accepted Answer

A) True 
 B)False

Question 15

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Club dues deductible

Accepted Answer

A)  Cover charge paid to entertain client at a night club.
B)  Deductible even if taxpayer does not take the new job
C)  Company picnic sponsored by employer
D)  Use of Federal per diem allowance to substantiate meals while in travel status
E)  Does not have to be job relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S. person who is employed overseas)  returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) D) and L)
N) D) and I)

Question 16

Employees of a CPA firm located in Maryland may exclude from gross income the meals and lodging provided by the employer while they were on an audit in Delaware.

Accepted Answer

A) True 
 B)False

Question 17

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees. Which of the following is correct?

Accepted Answer

A)  Heather reduced her salary by $1,200, actually spent $1,500, and received only $1,200 as reimbursement for her medical expenses. Heather's gross income will be reduced by $1,500.
B)  Heather reduced her salary by $1,200, and received only $900 as reimbursement for her actual medical expenses. She is not refunded the $300 remaining balance, but her gross income is reduced by $1,200.
C)  Heather reduced her salary by $1,200, and received only $800 as reimbursement for her medical expenses. She is not refunded the $400. Her gross income is reduced by $800.
D)  Heather reduced her salary by $1,200, and received only $900 as reimbursement for her medical expenses. She forfeits the $300. Her gross income is reduced by $300.
E)  None of these.F) A) and B)
G) C) and D)

Exam 11: Individuals As Employees and Proprietors

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year. The supper money received:

Correct Answer
verified

If a married taxpayer is an active participant in another qualified retirement plan, the traditional IRA deduction phaseout begins at $98,000 of AGI for a joint return in 2016.

Correct Answer
verified

A U.S. citizen who works in France from February 1, 2016 until January 31, 2017 is eligible for the foreign earned income exclusion in 2016 and 2017.

Correct Answer
verified

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes. During 2016, his mileage was as follows: How much can Rod claim for mileage?

Correct Answer
verified
$5,969 [(8,800 miles × $0.54, ...
View Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Nondeductible moving expense

Correct Answer
verified

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening. His expenses were as follows: What is Alfredo's deductible expense for the trip?

Correct Answer
verified
$1,002 ($900 + $60 +...
View Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment applies

Correct Answer
verified

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?

Correct Answer
verified

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip. While in Chicago, taxpayer uses the hotel valet service to have some laundry done. The valet charge is a nondeductible personal travel expense.

Correct Answer
verified

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans. Their total AGI for 2016 is $120,000. Each is employed and earns a salary of $65,000. What are their combined deductible contributions to traditional IRAs?

Correct Answer
verified

An individual, age 40, who is not subject to the phase-out provision may contribute a nondeductible amount to a Roth IRA up to $5,500 per year in 2016.

Correct Answer
verified

Carla is a deputy sheriff. Her employer requires that she live in the county where she is employed. Housing is very expensive; so the county agreed to pay her $4,800 per year to cover the higher cost of housing. Carla must include the housing supplement in her gross income.

Correct Answer
verified

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Club dues deductible

Correct Answer
verified

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees. Which of the following is correct?

Correct Answer
verified

Employees of a CPA firm located in Maryland may exclude from gross income the meals and lodging provided by the employer while they were on an audit in Delaware.

Correct Answer
verified

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $55,000 in 2016. The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

Correct Answer
verified

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Deductible job-hunting expenses

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year. The supper money received:

Correct AnswerverifiedShow Answer

If a married taxpayer is an active participant in another qualified retirement plan, the traditional IRA deduction phaseout begins at $98,000 of AGI for a joint return in 2016.

Correct AnswerverifiedShow Answer

A U.S. citizen who works in France from February 1, 2016 until January 31, 2017 is eligible for the foreign earned income exclusion in 2016 and 2017.

Correct AnswerverifiedShow Answer

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes. During 2016, his mileage was as follows: ​ How much can Rod claim for mileage?

Correct Answerverified$5,969 [(8,800 miles × $0.54, ...View AnswerShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Nondeductible moving expense

Correct AnswerverifiedShow Answer

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening. His expenses were as follows: ​ What is Alfredo's deductible expense for the trip?

Correct Answerverified$1,002 ($900 + $60 +...View AnswerShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment applies

Correct AnswerverifiedShow Answer

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?

Correct AnswerverifiedShow Answer

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip. While in Chicago, taxpayer uses the hotel valet service to have some laundry done. The valet charge is a nondeductible personal travel expense.

Correct AnswerverifiedShow Answer

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans. Their total AGI for 2016 is $120,000. Each is employed and earns a salary of $65,000. What are their combined deductible contributions to traditional IRAs?

Correct AnswerverifiedShow Answer

An individual, age 40, who is not subject to the phase-out provision may contribute a nondeductible amount to a Roth IRA up to $5,500 per year in 2016.

Correct AnswerverifiedShow Answer

Carla is a deputy sheriff. Her employer requires that she live in the county where she is employed. Housing is very expensive; so the county agreed to pay her $4,800 per year to cover the higher cost of housing. Carla must include the housing supplement in her gross income.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Club dues deductible

Correct AnswerverifiedShow Answer

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees. Which of the following is correct?

Correct AnswerverifiedShow Answer

Employees of a CPA firm located in Maryland may exclude from gross income the meals and lodging provided by the employer while they were on an audit in Delaware.

Correct AnswerverifiedShow Answer

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $55,000 in 2016. The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

Correct AnswerverifiedShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Deductible job-hunting expenses

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes. During 2016, his mileage was as follows: How much can Rod claim for mileage?

Correct Answer
verified
$5,969 [(8,800 miles × $0.54, ...
View Answer

Correct Answer
verified

Alfredo, a self-employed patent attorney, flew from his home in Chicago to Miami, had lunch alone at the airport, conducted business in the afternoon, and returned to Chicago in the evening. His expenses were as follows: What is Alfredo's deductible expense for the trip?

Correct Answer
verified
$1,002 ($900 + $60 +...
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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