Question

1. Aiden performs services for Lucas. Which of the following factors indicates that Aiden is an employee rather than an independent contractor?

a.         Aiden provides his own support services (e.g., work assistants).

b.         Aiden obtained his training (i.e., job skills) from a technical school he paid for himself.

c.         Aiden is paid based on tasks performed, regardless of how much time he spends on a task.

d.         Aiden works only for Lucas.

e.         None of these.

2. Amy works as an auditor for a major CPA firm. During the months of September through November of 2017, she was assigned to the team auditing Garnet Corporation. As a result, every day she drives from her home to Garnet and returns home after work. Mileage is as follows:

                                    Miles

Home to office            10

Home to Garnet          20

Office to Garnet          25

For these three months, Amy’s deductible mileage for each workday is:

a.         20.

b.         25.

c.         40.

d.         50.

e.         70.

3. During the current year, John (a self-employed management consultant) went from Milwaukee to California on business. After a five-day business meeting, he spent four days vacationing at the beach. His total expenses for the trip are:

Air fare                                     $3,200

Lodging ($150 per night)           1,350

Meals ($60 per day)                      540

Entertainment                               630

Presuming no reimbursement, deductible expenses are:

a.         $3,850.

b.         $3,900.

c.         $4,500.

d.         $4,100.

e.         None of these

4. Which, if any, of the following is an advantage of using the simplified method for determining the office use of a home deduction compared to using the regular method?

a.         No depreciation on computer equipment used in the office has to be computed using the simplified method.

b.         The exclusive use requirement does not have to be met if the simplified method is used.

c.         The simplified method allows the taxpayer to avoid issues that arise in allocating expenses of operating the home between business and personal use.

d.         The simplified method can be used for a residence that is rented (not owned) by the taxpayer.

e.         None of these is correct.

5. Which of the following is not allowed as an itemized deduction for 2018?

a.         Cash donation to a church.

b.         Interest expense on an $800,000 loan incurred in 2016 to buy a principal residence.

c.         A subscription to the Wall Street Journal to help a business professor keep abreast of developments relevant to her classes.

d.         Gambling losses to the extent of gambling winnings.

e.         All are allowed as itemized deductions.

Answer 1

Answer:-

1) e)none of these

aiden is paid based on hours worked.

2) c) 40

home to garmet = 2×20 = 40

3)(e) none of these ( 4820)

Following the IRS guidelines, we can deduct the following expenses:

Air fare $3,200 (100% of actual expenses)
Meals $270 (= $540 x 50%; deductions for meals are only 50% of the unreimbursed cost)
Lodging $1350 (100% of actual expenses)
The total deductible expenses are $3,200 + $270 + $1350 = $4,820

4) (a)No depreciation on computer equipment used in the office has to be computed using the simplified method.

5)(e)all are allowed as itemized deductions