You are watching: Which of the following statements is true of expenses?
1. Near year end, P, a cash basis, calendar year taxpayer, payment for miscellaneous deductible prices as described below. 1. The payment to be dropped in the mail before year end. 2. P provided a keep in mind evidencing she promise to salary the lot in 3 months.
3. The amount to be charged top top her understand Card ~ above December 28. The charge appeared on her bill for the duration December 1 with December 31, i m sorry she got in January and also which she payment on January 20. The financial institution actually paid the price in January. 4. The amount was paid using the pay by phone service noted by her bank.
P dubbed in the fee on December 20. The financial institution sent her a explain indicating the it had actually paid the charge on January 3. P might deduct the expense in i beg your pardon cases? a.
1 b. 1 and also 2 c. 1 and 3 d. 1, 3, and 4 e. 1, 2, 3, and also 4 2. The crucial reason for determining whether an item is deductible together an cost under § 162 or under § 212 is the a. Production of income costs are no deductible. B. § 162 company expenses usually room deductions because that A. G. I. , if § 212 production of income expenses usually are assorted itemized deductions. C. § 162 organization expenses space deductions native A.
G. I. , when § 212 production of income expenses are deductions for A. G. I. D. The resolves details ownership questions. 3. C purchased two cars in 2010 a Corvette because that $20,000 and also a Buick because that ,000.
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Both cars to be used solely for personal purposes. During the year, C sold the Corvette to a automobile collector for $24,000 and the Buick because that $7,000. Based upon these 2 transactions he will certainly report a. A obtain of $1,000. B. A acquire of $4,000. C. A obtain of $4,000 and also a lose of $3,000. D. No obtain or loss. 4. F, a calendar year, cash basis taxpayer, started a business on June 1.
Which of The adhering to Statements Is True that Expenses
Her lease compelled monthly payments of $1,000 beginning on June 1. Insurance because that the premises, also begun top top June 1, was to be paid every 6 months and cost $600 for each six month duration (she paid she premiums early on June 1 and December 1). F’s deductions because that these expenses complete a. $7,000. B. $7,100. C. $7,600. D. $8,200. $1,000 * 7 months = $7,000 rent expense $600 premium paid 6/1 = 600 insurance expense $600 premium paid 12/1 = 600 7,000 + 600 + 600 = $8,200 insurance price 5. I m sorry of the complying with is not a deduction for A. G. I.? a. Lawn mowing price for a rental property actively managed by the taxpayer. . Deductible prices related to a physician’s residence office. C. Employee transportation expense not reimbursed by the employer. D. Employee transportation expense reimbursed by the employer and included in employee’s income. 6K is an lawyer who had actually to travel to Chicago because that a trial. Her legislation firm reimbursed she for the $1,200 hotel bill and $200 for food, however only fifty percent of she $200 entertainment expense eligible because that deduction under § 162. If the law firm has the $1,500 in K’s compensation ~ above her kind W 2, she might a. Incorporate the $1,500 together a assorted itemized deduction. B. Educt the $1,500 for A. G. I. C. Include the $100 unreimbursed entertainment expense with the assorted itemized deductions. D. Both b and c space true. 7F, an attorney in new York, also operates a small farm in new Jersey. During the year, he report the complying with income and expenses from the farm: gross income$8,000 Depreciation(3,000) property taxes(6,000) various other operating expenses(4,000) presume the task is taken into consideration a hobby, F may deduct a. Counting $6,000, other $0, depreciation $0. B. Counting $6,000, other $0, depreciation $2,000. C. Counting $6,000, various other $2,000, depreciation $0. . Taxes $6,000, various other $4,000, depreciation $3,000. 8Which among the adhering to would qualify, at least in part, as a deductible educational expense? a. The cost of transportation in between home and school ~ above a nonworking day. B. Transportation in between work and school top top a functioning day. C. Both the the above. D. No of the above. 9. C derived a new job in Alaska v H&J Engineering. She incurred the adhering to moving expenses: transport of furniture and also household goods$1,000 house hunting trip1,900 Attorney’s fees on sale of former residence1,400
Assuming C is eligible to deduct her relocating expenses, what is the amount of the deduction? a. $1,000 b. $2,900 c. $3,400 d. $3,900 e. $4,400 10. Which of the complying with statements regarding deductions for house office prices is true? a. Deductions might be taken only if the home office is supplied for the taxpayer’s main business. B. Deductions might be bring away if the residence office is supplied regularly for meeting clients or client in the typical course the the taxpayer’s business. C. Deductions might not be asserted if the taxpayer merely performs bureaucratic tasks concerned his company in the home office. D.
All of above are true. E. No one of the above is true. 11. K is an lawyer who had actually to take trip to Chicago for a trial. Her regulation firm reimbursed her for the $1,200 hotel bill and $200 because that food, however only half of her $200 entertainment price eligible because that deduction under § 162. If the regulation firm contains the $1,500 in K’s compensation ~ above her kind W 2, she may a. Include the $1,500 together a miscellaneous itemized deduction. B. Deduct the $1,500 because that A. G. I. C. Incorporate the $100 unreimbursed entertainment cost with the assorted itemized deductions. D. Both b and c space true. 12. Which among the adhering to statements is true? . The expenses of commuting room personal, and also as such are never deductible nevertheless of the neighboring circumstances. B. The prices of commuting from task A to task B space deductible come the level that the distance between Jobs A and B does not exceed the street from residence to job A. C. The costs of commuting come a temporary assignment and also returning the very same day when the momentary assignment is outside the vicinity in which the taxpayer conducts his service (the tax home) room deductible and also are determined based upon the expense of transportation from the employee’s office to the momentary location. . B and also c are true. E. All are false. 13. I m sorry statement concerning deductible transportation prices is true? a. B cd driver 20 mile to his office, then later in the day cd driver to accomplish a client at the client’s office. By the time he gets home that night he has actually driven 63 miles. He can deduct the cost of control 23 miles. B. F, an architect, normally drives 40 miles round pilgrimage from residence to office. Today, she skips the office and drives straight to a task site to check the construction. She round expedition is 50 miles. She might deduct a cost of 50 miles. C. M, a contractor, functions out of her home.
She may deduct the price of driving to a client’s location of business. D. More than one prize is true. E. All are true. 14S maintains a major residence in St. Louis, Missouri. He lays brick for a living. S’s employee asked the to go to Chicago, Illinois to occupational on a solitary job for 6 months. early to difficulties with weather, S was compelled to stay in Chicago because that a total of eleven months. S wants to deduct a part of the expense of meals and also lodging in Chicago if on the job. S will be a. Denied the deduction due to the fact that the task in Chicago was only a short-lived assignment. . Allowed the deduction since the task in Chicago will certainly be taken into consideration temporary, together it was not an unknown assignment. C. Permitted the deduction due to the fact that the task in Chicago will certainly be taken into consideration indefinite, together it was no a momentary assignment. D. Refuse the deduction due to the fact that living expenses are always nondeductible personal expenses. 15D owns and also operates her own real legacy business. She loves to entertain. Indicate which the the following statements is true. Assume the expenditure is deductible uneven otherwise implied. A. D takes her brand-new neighbor come the round game.
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The price is deductible, presume D’s entertainment expense creates goodwill that might lead the individual to end up being D’s customer if and when that decides to sell his house. B. D bring away a prospective client to the theater. Uneven the taxpayer deserve to prove otherwise, the IRS presumes the cost is not deductible since the nature that the event precludes service discussion. C. D stop a golf outing for all of her employees. D might deduct the expense, assuming that is mostly for she employees. D. Much more than one yet less than every one of the statements above are true. E. None of the statements over is true.