Question 1

Under the right circumstances,a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Accepted Answer

If the taxpayer is attending a qualifying educational program that requires them to be away from home overnight, then their meals and lodging expenses can be considered a deductible educational expense. This applies to both students and teachers. However, the expenses must be reasonable and necessary and cannot be extravagant.

Question 2

A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a job at the new location.

Accepted Answer

According to IRS rules, a taxpayer can qualify for the moving expense deduction if they move for a new job or if they are moving to start a new job. However, the taxpayer must meet certain requirements such as distance and time tests. The taxpayer does not have to have a job at the new location at the time of the move to qualify for the deduction.

Question 3

Liam just graduated from college.Because it is his first job,the cost of moving his personal belongings from his parents' home to the job site does not qualify for the moving expense deduction.

Accepted Answer

The cost of moving personal belongings from a former home to a new home for a job can qualify for the moving expense deduction, even if it is the taxpayer's first job.

Question 4

Eileen lives and works in Mobile.She travels to Rome for an eight-day business meeting,after which she spends two days touring Italy.All of Eileen's airfare is deductible.

Accepted Answer

Eileen's airfare for the business meeting is deductible as a business expense, according to the IRS guidelines. The two days she spends touring Italy are not deductible as they are considered personal time.

Question 5

A taxpayer who lives and works in Tulsa travels to Buffalo for five days.If three days are spent on business and two days are spent on visiting relatives,only 60% of the airfare is deductible.

Accepted Answer

The entire cost of the airfare is deductible because the primary reason for the trip is business. The days spent visiting relatives do not affect the deductibility of the transportation costs.

Question 6

Alexis (a CPA) 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).

Accepted Answer

Moving expenses can still be deductible if the move is closely related to the start of work at a new job, even if the taxpayer is changing employment status. However, there are certain criteria that must be met for the deduction to apply.

Question 7

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

The answer of A taxpayer who lives and works in...

Question 8

Bob lives and works in Newark,NJ.He travels to London for a three-day business meeting,after which he spends three days touring Scotland.All of his air fare is deductible.

Accepted Answer

Since Bob's trip to London for a business meeting is considered work-related travel, the entire airfare is deductible. Additionally, the three days he spends touring Scotland after the business meeting can also be deducted as a business expense as long as he conducted business while there or can prove that the trip was primarily for business purposes.

Question 9

The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.

Accepted Answer

According to the IRS, to deduct travel expenses, a taxpayer must be traveling away from home for business purposes. However, if the period of employment in a single location exceeds one year, it is considered indefinite, and the location becomes the taxpayer's new tax home, making any travel expenses nondeductible.

Question 10

Sick of her 65 mile daily commute,Edna purchases a condo that is only four miles from her job.Edna's moving expenses to her new condo are not allowed and cannot be claimed by her as a deduction.

Accepted Answer

The answer of Sick of her 65 mile daily commute,Edna...

Question 11

An education expense deduction may be allowed even if the education results in a promotion or pay raise for the employee.

Accepted Answer

According to the IRS Publication 970, education expenses may be deductible if they maintain or improve skills required in the taxpayer's job or business, or meet the express requirements of the taxpayer's employer, even if the education leads to a promotion or pay raise.

Question 12

Qualified moving expenses include the cost of lodging but not meals during the move.

Accepted Answer

According to IRS rules, qualified moving expenses include the cost of lodging but not meals during the move.

Question 13

After completing an overseas assignment in Oslo (Norway),Daniel retires from Pelican Corporation and moves to a retirement community in Key West (Florida).Daniel's moving expenses from Oslo to Key West are deductible as they are exempt from the time test.

Accepted Answer

Moving expenses are typically only deductible if they are closely related to the start of work at a new job or business location, and if the taxpayer meets either the distance test or the time test. However, there is an exception for taxpayers who are retiring and moving to a new home to be closer to relatives or to an essential medical facility. This exception allows them to deduct their moving expenses even if they do not meet the time test. Therefore, Daniel's moving expenses from Oslo to Key West would be deductible because he is retiring and moving to a new home.

Question 14

In May 2017,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2017 any deduction for moving expenses he may have claimed on his 2016 tax return.

Accepted Answer

The answer of In May 2017,after 11 months on a...

Question 15

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Accepted Answer

Kelly's moving expenses may be deductible since the move was for a job-related purpose and the distance test and time test are met. The fact that she changed professions does not automatically disqualify her from taking the deduction.

Question 16

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

Accepted Answer

The answer of There is no cutback adjustment for meals...

Question 17

Lloyd,a practicing CPA,pays tuition to attend law school.Since a law degree involves education leading to a new trade or business,the tuition is not deductible.

Accepted Answer

The tuition may still be deductible if it can be shown to maintain or improve skills required in Lloyd's current trade or business. However, if it is solely for the purpose of entering a new trade or business, it is not deductible.

Question 18

In November 2017,Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2017 income tax return since she has not yet satisfied the 39-week time test.

Accepted Answer

The answer of In November 2017,Katie incurs unreimbursed moving expenses...

Question 19

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.

Accepted Answer

The answer of At age 65,Camilla retires from her job...

Question 20

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

Accepted Answer

Qualified moving expenses that are not reimbursed by the employer can be deducted as an adjustment to income, which means it is a deduction for AGI.

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