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

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Question 41

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Logan,Caden,and Olivia are three unrelated parties who claim the standard deduction.All are married and attend Citron University and each pays tuition of $6,100.Of this payment,Logan can claim a deduction of $4,000; Caden a deduction of $2,000; and Olivia no deduction at all.Explain.

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The most apparent explanation is the lim...

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Question 42

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Regarding tax favored retirement plans for employees and self-employed persons,comment on the following:

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Question 43

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The Federal per diem rates that can be used for "deemed substantiated" purposes are not the same for all locations in the country.

Concerning the deduction for moving expenses,what circumstances,if any,will excuse a taxpayer from meeting the time test of 39 or 78 weeks?

Alexis (a CPA and JD)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e.,went from self-employed to employee).

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.

In the current year,Bo accepted employment with a Kansas City law firm after graduating from law school.Her expenses for the year are listed below:

Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.

The portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

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

Dove Corporation pays for a trip to Jamaica for its two top salespersons.This expense is not subject to the cutback adjustment.

There is no cutback adjustment for meals and entertainment as to employees who are subject to regulation by the U.S.Department of Transportation.

Discuss the 2%-of-AGI floor and the 50% cutback limitation in connection with various employee expenses under the following arrangements:

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

Ramon and Ingrid work in the field of public relations and incur sizable entertainment expenses.Ramon is employed by a consumer products company,while Ingrid is a self-employed consultant.Regarding the tax treatment of the entertainment expenses,when would:

At age 65,Camilla retires from her job in Boston and moves to Florida.As a retiree,she is not subject to the time test in deducting her moving expenses.

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.

In May 2012,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2012 any deduction for moving expenses he may have claimed on his 2011 tax return.

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

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?