BUSINESS

Question 1

  1. At one point in time, there was no cutback adjustment applicable to business meals. True
    False

0.5 points  

Question 2

  1. Transportation expenses are more broadly defined in the Code than are travel expenses. True
    False

0.5 points  

Question 3

  1. Employees who render an adequate accounting to the employer and are fully reimbursed will still not avoid the 2 percent of AGI floor on such expenses. True
    False

0.5 points  

Question 4

  1. The cost of a CPA review course is deductible as an education expense of an employee. True
    False

0.5 points  

Question 5

  1. A room in a residence that is used both for personal and business cannot qualify for the office in the home deduction even if the business use predominates. True
    False

0.5 points  

Question 6

  1. Richard owns a principal residence in New Orleans, a vacation lodge in Montana, and a yacht (with living quarters – cooking, sleeping, bathroom facilities) on the Mississippi River. All three properties have mortgages on which Richard pays interest. Qualified residence interest cannot include the interest paid on the mortgage covering the yacht.

    True
    False

0.5 points  

Question 7

  1. If a taxpayer makes a contribution of ordinary income property, the amount of the deduction is equal to the basis usually of the property.

    True
    False

0.5 points  

Question 8

  1. Tom pays half of the premiums related to coverage under his employer’s group medical plan, and his employer pays the other half. No portion of the total premium is deductible as a medical expense by Tom.

    True
    False

0.5 points  

Question 9

  1. Ina pays $320 to license her car, of which $280 is based on the value of the car. She can deduct $320 as an itemized deduction.

    True
    False

0.5 points  

Question 10

  1. In no case may the cutback adjustment (on the itemized deductions) be more than 70 percent of the covered itemized deductions.

    True
    False

0.5 points  

Question 11

  1. The realized gain or loss is the difference between the amount realized from a sale or other disposition and the property’s adjusted basis.

    True
    False

0.5 points  

Question 12

  1. The adjusted basis of property is not increased by the cost of repairs and maintenance to the property.

    True
    False

0.5 points  

Question 13

  1. Gift property has a zero basis to the donee because the donee did not pay anything for the property.

    True
    False

0.5 points  

Question 14

  1. The basis of inherited property is usually its fair market value on the date of the decedent’s death.

    True
    False

0.5 points  

Question 15

  1. Gains and losses on nontaxable exchanges are deferred because the tax law recognizes that nontaxable exchanges result in a change in the form but not the substance of the taxpayer’s relative economic position. True
    False

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