Question 1

Mallard Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is subject to the cutback adjustment.

Accepted Answer

The answer of Mallard Corporation furnishes meals at cost to...

Question 2

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Accepted Answer

Both traditional and Roth IRAs allow for tax-free accumulation of income within the plan, though the tax benefits may vary depending on the type of IRA.

Question 3

After graduating from college with a degree in chemistry,Alberto obtains a job as a chemist with DuPont.Alberto's job search expenses qualify as deductions.

Accepted Answer

The answer of After graduating from college with a degree...

Question 4

In the case of an office in the home deduction,the exclusive business use test does not apply when the home is used as a daycare center.

Accepted Answer

The exclusive business use test does not apply when the home is used as a daycare center for the office in the home deduction. This means that if a portion of your home is used regularly and exclusively for the care of children, elderly persons, or persons with disabilities, you may still qualify for the deduction even if the space is also used for personal purposes.

Question 5

Madison is an instructor of fine arts at a local community college.If she spends $600 (not reimbursed)on art supplies for her classes,$250 of this amount can be claimed as a deduction for AGI.

Accepted Answer

The $250 deduction for educators only applies to K-12 teachers, instructors, counselors, principals, or aides for at least 900 hours a school year in a school that provides elementary or secondary education, not to college instructors.

Question 6

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.

Accepted Answer

If the taxpayer does not accompany the client to the event, tickets to a theater performance or sporting event can be treated as either business entertainment or a business gift. However, the treatment will depend on other factors like the purpose of the gift, the relationship between the taxpayer and the recipient, and the cost of the tickets.

Question 7

By itself,credit card receipts will constitute adequate substantiation for travel expenses.

Accepted Answer

Although credit card receipts may be useful as a backup, they are not sufficient on their own to fully substantiate travel expenses. Other documentation, such as receipts for meals, lodging, and transportation, as well as a detailed itinerary and purpose for the trip, may also be required.

Question 8

If a taxpayer does not own a home but rents an apartment,the office in the home deduction is not available.

Accepted Answer

The home office deduction is not limited to homeowners; renters can also qualify as long as they use part of their rental for business purposes and meet other IRS requirements.

Question 9

If the cost of uniforms is deductible,their maintenance cost (e.g.,laundry,dry cleaning,alterations)also is deductible.

Accepted Answer

If the cost of uniforms is considered a deductible business expense, then the cost of their maintenance (such as laundry, dry cleaning, and alterations) is also considered a deductible business expense.

Question 10

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

Accepted Answer

The answer of A taxpayer who claims the standard deduction...

Question 11

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Accepted Answer

Qualifying job search expenses can be deducted regardless of whether the taxpayer actually changes jobs, as long as the expenses are incurred in the search for a new job in the same line of work.

Question 12

Frank,a recently retired FBI agent,pays job search expenses to obtain a position with a city police department.Frank's job search expenses do not qualify as deductions.

Accepted Answer

The answer of Frank,a recently retired FBI agent,pays job search...

Question 13

A taxpayer takes six clients to an NBA playoff game.If all of the tickets (list price of $120 each)are purchased on the Internet for $1,800 ($300 each),only $150 ($300 ´ 50% cutback adjustment)per ticket is deductible.

Accepted Answer

The answer of A taxpayer takes six clients to an...

Question 14

Jackson gives his supervisor a $30 box of chocolates on her birthday.Jackson may claim only $25 as a deduction.

Accepted Answer

The answer of Jackson gives his supervisor a $30 box...

Question 15

Ethan,a bachelor with no immediate family,uses the Pine Shadows Country Club exclusively for his business entertaining.None of Ethan's annual dues for his club membership are deductible.

Accepted Answer

The answer of Ethan,a bachelor with no immediate family,uses the...

Question 16

When contributions are made to a Roth IRA,they are deductible by the participant.Later distributions from a the IRA,however,are fully taxed.

Accepted Answer

Contributions to a Roth IRA are not deductible by the participant. However, qualified distributions from the account, which are made after five years and after reaching age 59 and a half, are tax-free.

Question 17

Tired of renting,Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire qualifies as a uniform expense.

Accepted Answer

According to IRS regulations, a uniform expense is any clothing that is required as a condition of employment and is not suitable for everyday wear. The academic robes worn during a college graduation procession qualify as a uniform expense because they are required for the event and not suitable for everyday wear. As such, the cost of the attire can be deducted as an employee expense.

Question 18

Every year,Penguin Corporation gives each employee a fruit basket and a bottle of wine at Christmas.These gifts are not subject to the cutback adjustment.

Accepted Answer

The statement clearly states that the gifts given by Penguin Corporation to its employees at Christmas are not subject to cutback adjustment.

Question 19

As Christmas presents,Lily sends gift certificates (each valued at $25)to Caden (a key client)and to each of his two minor children.Lily can deduct $75 (3 ´ $25)as to these gifts.

Accepted Answer

The answer of As Christmas presents,Lily sends gift certificates (each...

Question 20

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

Accepted Answer

If the portion of the office in the home deduction that exceeds the income from the business cannot be fully deducted in the current year, it can be carried forward to future years. This is known as a carryover or carryforward.

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