Question 1

Under the Swan Company's cafeteria plan, all full-time employees are allowed to select any combination of the benefits below, but the total received by the employee cannot exceed $8,000 a year. I.Group medical and hospitalization insurance for the employee, $3,600 a year.
II) Group medical and hospitalization insurance for the employee's spouse and children,
$1,200 a year.
III) Child-care payments, actual cost but not more than $4,800 a year.
IV) Cash required to bring the total of benefits and cash to $8,000.
Which of the following statements is true?

Accepted Answer

A)  Sam, a full-time employee, selects choices II and III and $2,000 cash.His gross income must include the $2,000.
B)  Paul, a full-time employee, elects to receive $8,000 cash because his wife's employer provided these same insurance benefits for him.Paul is not required to include the $8,000 in gross income.
C)  Sue, a full-time employee, elects to receive choices I, II and $3,200 for III.Sue is required to include $3,200 in gross income.
D)  All of these.
E)  None of these.F) C) and E)
G) None of the above

Question 2

Which of the following expenses, if any, qualify as deductible?

Accepted Answer

A)  Contributions to a Coverdell Education Savings Account CES
A)  .
B)  Contributions to a qualified tuition program § 529 plan) .
C)  Job hunting expense of FBI agent who applies for the job of city manager of Beaumont TX) .
D)  Contribution to a traditional IRA.
E)  None of these.F) A) and D)
G) B) and E)

Question 3

Which, if any, of the following factors is not a characteristic of independent contractor status?

Accepted Answer

A)  Work-related expenses are reported on Form 2106.
B)  Receipt of a Form 1099 reporting payments received.
C)  Workplace fringe benefits are not available.
D)  Services are performed for more than one party.
E)  None of these.F) B) and E)
G) C) and D)

Question 4

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Accepted Answer

A) True 
 B)False

Question 5

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees.After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Accepted Answer

A) True 
 B)False

Question 6

Ralph made the following business gifts during the year.  Presuming proper substantiation, Ralph's deduction is:

Accepted Answer

A)  $0.
B)  $53.
C)  $73.
D)  $78.
E)  $98.F) C) and E)
G) A) and C)

Question 7

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Accepted Answer

A) True 
 B)False

Question 8

Sue does not file a Schedule SE with her Form 1040.

Accepted Answer

The answer of Sue does not file a Schedule SE...

Question 9

Allowing for the overall limitation 50% reduction for meals) , which of the following trips, if any, will qualify for the travel expense deduction?

Accepted Answer

A)  Dr.Jones, a self-employed general dentist, attends a two-day seminar on developing a dental practice.
B)  Dr.Brown, a self-employed surgeon, attends a two-day seminar on financial planning.
C)  Paul, a romance language high school teacher, spends summer break in France, Portugal, and Spain improving his language skills.
D)  Myrna went on a two-week vacation in Boston.While there, she visited her employer's home office to have lunch with former co-workers.
E)  All of these.F) A) and D)
G) A) and E)

Question 10

Fresh Bakery often has unsold donuts at the end of the day.The bakery allows employees to take the leftovers home.The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Accepted Answer

A) True 
 B)False

Question 11

Flamingo Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is not subject to the overall limitation 50%).

Accepted Answer

A) True 
 B)False

Exam 11: Individuals As Employees and Proprietors

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Correct Answer
verified

Sue does not file a Schedule SE with her Form 1040.

Correct Answer
verified

Fresh Bakery often has unsold donuts at the end of the day.The bakery allows employees to take the leftovers home.The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Correct Answer
verified

Which, if any, of the following factors is not a characteristic of independent contractor status?

Correct Answer
verified

Flamingo Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is not subject to the overall limitation 50%).

Correct Answer
verified

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees.After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Correct Answer
verified

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Correct Answer
verified

Which of the following expenses, if any, qualify as deductible?

Correct Answer
verified

Correct Answer
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Ralph made the following business gifts during the year. Presuming proper substantiation, Ralph's deduction is:

Correct Answer
verified

Allowing for the overall limitation 50% reduction for meals) , which of the following trips, if any, will qualify for the travel expense deduction?

Correct Answer
verified

Exam 11: Individuals As Employees and Proprietors

A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.

Correct AnswerverifiedShow Answer

Sue does not file a Schedule SE with her Form 1040.

Correct AnswerverifiedShow Answer

Fresh Bakery often has unsold donuts at the end of the day.The bakery allows employees to take the leftovers home.The employees are not required to recognize gross income because the bakery does not incur any additional cost.

Correct AnswerverifiedShow Answer

Which, if any, of the following factors is not a characteristic of independent contractor status?

Correct AnswerverifiedShow Answer

Flamingo Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is not subject to the overall limitation 50%).

Correct AnswerverifiedShow Answer

Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees.After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.

Correct AnswerverifiedShow Answer

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

Correct AnswerverifiedShow Answer

Which of the following expenses, if any, qualify as deductible?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Ralph made the following business gifts during the year. Presuming proper substantiation, Ralph's deduction is:

Correct AnswerverifiedShow Answer

Allowing for the overall limitation 50% reduction for meals) , which of the following trips, if any, will qualify for the travel expense deduction?

Correct AnswerverifiedShow Answer

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