Which of the following taxpayers may not use the standard mileage method of calculating transportation costs? a.A self-employed CPA who drives a computer-equipped minivan to visit clients. b.An attorney who uses his Tesla for calling on clients. c.A taxpayer who has a fleet of 10 business automobiles. d.A real estate salesperson who drives a $70,000 Mercedes while showing houses. e.All of these taxpayers may use the standard mileage method.

Which of the following taxpayers may not use the standard mileage method of calculating transportation costs? a.A self-employed CPA who drives a computer-equipped minivan to visit clients. b.An attorney who uses his Tesla for calling on clients. c.A taxpayer who has a fleet of 10 business automobiles. d.A real estate salesperson who drives a $70,000 Mercedes while showing houses. e.All of these taxpayers may use the standard mileage method.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter3: Business Income And Expenses

Section: Chapter Questions

Problem 6MCQ

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In which of the following situations may the taxpayer take an education expense on Schedule C? a.John, a plumber by trade, is taking classes to qualify as an electrician so he may take on more complex contractor jobs. b.Henry, a self-employed administrative assistant, is taking an advanced Word computer program class through an adult school program. c.Ann Marie, a hostess at a restaurant, is taking a review course in order to pass the certified financial planner examination. d.Barbie, a salesperson, is flying on numerous commercial airplanes in order to observe the flight attendants so that she may improve her public relations skills.
Does the taxpayer recognize gross income in the following situations? a. Ava is a filing clerk at a large insurance company. She is permitted to leave the premises for lunch, but she usually eats in the company's cafeteria because it is quick and she is on a tight schedule. On average, she pays $2 for a lunch that would cost $12 at a restaurant and it cost her employer $10 to prepare. However, if the prices in the cafeteria were not so low and the food was not so delicious, she would probably bring her lunch at a cost of $3 per day. Ava's meals are provided as . Therefore, Ava would include $fill in the blank 08654900eff8078_2 per meal in her gross income. b. Scott is an executive for an international corporation located in New York City. Often he works late, taking telephone calls from the company's European branch. Scott often stays in a company-owned condominium when he has a late-night work session. The condominium is across the street from the company office and…
1. Deductible transportation expenses: a.Do not include the normal costs of commuting. b.Do not include daily expenses for transportation between the taxpayer's home and temporary work locations if the taxpayer has a regular place of business. c.Include only costs incurred while away from home. d.Include meals and lodging. 2. Barry is a self-employed attorney who travels to New York on a business trip during 2021. Barry's expenses were as follows: Airfare $550 Taxis 40 Restaurant meals 150 Lodging 350 How much may Barry deduct as travel expenses for the trip? a.$0 b.$1,015 c.$940 d.$1,090 e.None of these choices are correct. 3. Which of the following is deductible as dues, subscriptions, or publications? a.Subscription to the "Journal of Taxation" for a tax attorney b.Dues to a health club for a doctor c.Dues to the drama club for a student d.Subscription to "Vogue" magazine for a corporate president e.None of these choices are correct.
Which of the following describes a taxpayer with a hobby? a) Sara, an independent seller for a cosmetics company, who sells products to friends and neighbors because she enjoys learning about the new products available. She maintains separate business and personal accounts and keeps meticulous business records. b) Craig, a taxpayer who builds model trains. He occasionally wins cash prizes in local train modeling contests. He deposits his winnings into his personal checking account. c) Everett, a university research associate, who had made profits on his research activities in the past and fully expects to do so in the future. d) Gail, a taxpayer who writes travel articles. She visits each location only after she has a valid contract with a publisher and keeps her business and personal accounts separate. Her travel expenses and earnings are in line with the earnings and expenses of other travel writers.
Which of the following describes a taxpayer with a hobby? Sara, an independent seller for a cosmetics company, who sells products to friends and neighbors because she enjoys learning about the new products available. She maintains separate business and personal accounts and keeps meticulous business records. Craig, a taxpayer who builds model trains. He occasionally wins cash prizes in local train modeling contests. He deposits his winnings into his personal checking account. Everett, a university research associate, who had made profits on his research activities in the past and fully expects to do so in the future. Gail, a taxpayer who writes travel articles. She visits each location only after she has a valid contract with a publisher and keeps her business and personal accounts separate. Her travel expenses and earnings are in line with the earnings and expenses of other travel writers.
[The following information applies to the questions displayed below.] What amounts are included in gross income for the following taxpayers? (Leave no answers blank. Enter zero if applicable.) a. Janus sued Tiny Toys for personal injuries from swallowing a toy. Janus was paid $34,000 for medical costs and $270,000 for punitive damages. Amount included in Gross Income Show Transcribed Text b. Carl was injured in a car accident. Carl's insurance paid him $580 to reimburse his medical expenses and an additional $290 for the emotional distress Carl suffered as a result of the accident. Amount included in Gross Income Show Transcribed Text c. Ajax published a story about Pete and as a result Pete sued Ajax for damage to his reputation. Ajax lost in court and paid Pete an award of $22,000. Amount included in Gross Income Show Transcribed Text د d. Bevis was laid off from his job last month. This month he drew $960 in unemployment benefits. Amount included in Gross Income Show Transcribed…
Which of the following, if true would weigh in favor of activity being considered business, rather than a hobby? The taxpayer engaging in the activity: 1) has consistently operated a loss. 2) spends a few weeks a year engaging in the activity. 3) works another job or occupation to earn their living. 4) Consulted market experts before beginning the activity.
Robert Jones has just rendered service for a taxpayer as an expert witness in a case heard by the U. S. Tax Court. The taxpayer is requesting reimbursement for Jones’ fees and for those amounts paid to her attorney in presenting the case. Jones’ billing rate for this type of engagement is $500 per hour, the market rate for such services in his city, plus out- of- pocket expenses (e. g., auto mileage, computer charges). How much of Jones’ fee will the taxpayer recover?
Peter Pan is a self-employed delivery driver. On one delivery trip, Peter Pan received a $100 ticket for being double parked in violation of city traffic laws. In an attempt to avoid the ticket, Peter Pan slipped the parking enforcement officer a $20 bill to "look the other way". Unfortunately, the parking enforcement officer took the $20, but still gave Peter Pan the ticket. How much of the $120 can Peter Pan deduct as a business expense?
Like 99% of other sane taxpayers, you, a self-employed CPA, elect the standard mileage rate ($0.58 per mile for 2019, $0.575 per mile for 2020) for deducting the cost of your business-related excursions from your home office, not that crazy “actual cost method” that would have you keeping every single receipt for every single car-related expense. But, in addition to gas, you incur the following costs on your trips to see clients (etc.) – tolls, parking, interest on car loan, repairs, insurance, and speeding tickets. Which, if any, of these expenses can you deduct in addition to the standard mileage rate, and why?
Juan is the owner of a "kalesa". He charges fees to customers who would want to ride on his "kalesa" and take a tour around the area. What is the tax implication of this to Juan? A. Operating the "kalesa" is subject to percentage tax on business. B. Operating the "Kalesa" is subject to VAT if the gross annual receipts exceed P3M. C. The transaction is exempt from business tax.
Lennart is currently working as a kitchen hand. Which of the following expenses incurred by Rebel can be claimed as a deduction? Select one:None of theseThe cost of parking near the restaurant on the day of the seminar, as she needed to drive directly to the seminar after work.All of the above.A vocational course Lennart is undertaking in real estate.A food hygiene seminar she paid to attend