Final Exam > Results Page
final exam score:
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100%PASSED
Final Exam > Question 1
All of the following are requirements for filing Schedule C-EZ except:
XXX Gross receipts under $100
Business expenses not exceeding $5,000
No home office deduction
No employees
Final Exam > Question 2
Which of the following is not correct with regard to vacation homes?
Where annual rental is fewer than 15 days, rental income is not reported, and no deductions are allowed (other than mortgage interest and taxes).
Where annual rental is 15 days or longer and personal use exceeds the lengthier of 14 days or 10% of the rental period, deductions and expenses are limited to rental income.
Where annual rental is 15 days or longer and personal use does not exceed 14 days or 10% of the rental period, property is treated as rental property subject to the passive loss limitations.
XXX Mortgage interest and property taxes are not deductible if expenses exceed rental income.
Final Exam > Question 3
What characteristic is not required for an accountable plan?
The employee must provide adequate substantiation of all expenses on a timely basis.
XXX The purpose of the expense must be defined at the time of payment.
The plan must require remittance of any advances or payments in excess of substantiated expenses.
Substantiation and remittance of excess amounts must be made on a timely basis.
Final Exam > Question 4
Accountable plans require that:
Advances be made within 30 days of expense
Substantiation be provided to the employer within 60 days of expense
Excess amounts be returned within 120 days of expense
XXX All of the above
Final Exam > Question 5
Which of the following is not deductible as an “actual car expense” by a taxpayer who uses that method to figure the deductible cost of operating his car for business purposes?
Depreciation
Gas and oil
XXX Parking fines
Lease fees
Final Exam > Question 6
Which of the following is not a deductible transportation expense?
Cost of round-trip transportation between an individual’s office and his client’s place of business
XXX Cost of round-trip transportation between an individual’s home and office while conducting business on his car phone
Cost of round-trip transportation between an individual’s home and a temporary training site in the same city
Cost of round-trip transportation between an individual’s office in the home and his client’s place of business
Final Exam > Question 7
In March 2015, Mitchell Dean bought a pre-owned car used 100% for business. The car cost $36,000 and weighs less than 6,000 pounds (assume that Mitchell made no other equipment purchases in 2015). In 2015, Mitchell may claim a depreciation allowance of:
XXX $3,160
$5,100
$25,000
$36,000
Final Exam > Question 8
Five elements must be proven with respect to entertainment expenses. Two of the elements are the amount and the business purpose of the expense. Which of the following is not one of the other three elements?
The place of the entertainment
XXX The nature of the entertainment
The time/date of the entertainment
The business relationship of the person(s) being entertained
Final Exam > Question 9
With regard to meal and entertainment expenses, all of the following statements are correct except:
Country club dues are not allowed as a deduction.
An entertainment expense must meet one of the two tests: directly related test or associated test.
XXX The allowable deduction for the cost of a Super Bowl ticket is limited to twice the face value of the ticket.
The deductible limit on business entertainment expenses is 50%.
Final Exam > Question 10
Julio Flores takes his wife on a business trip out of town; they fly to their destination. She does not work for Julio’s employer. The primary reason for the trip is business. The cost of her airfare is:
XXX Not deductible
Deductible up to 50%
Fully deductible if she accompanies him to luncheons
Fully deductible regardless of what she does on the trip
Final Exam > Question 11
On deducting the cost of business gifts, which of the following limitations applies?
50% of the cost of the gift
XXX $25 per individual each year
$400 per individual each year
Ordinary and necessary business expense
Final Exam > Question 12
In general, how is the percentage of business use of a home figured for purposes of the home office deduction?
XXX Square footage basis
Ratio of home office to number of rooms in the home
Hours worked in the home office
Flat 10% in all cases
Final Exam > Question 13
Harriet is a high school French teacher. In the summer she travels to France to practice her language skills. In regard to the cost of the trip, which of the following statements is correct?
She can deduct her travel costs as an educational expense.
She can deduct only the cost of airfare.
She can deduct airfare and lodging, but not meals.
XXX She cannot deduct any costs of the trip.
Final Exam > Question 14
Which of the following is not deductible as an itemized educational expense?
XXX William Bard was employed as a patent chemist on the condition that he obtain a law degree at his own expense. He enrolled in evening law school. When he graduated from law school, he was promoted to patent attorney, with a substantial increase in salary.
Marion Lane, an elementary school teacher, took additional courses to qualify her to teach mathematics in high school.
Theresa Roland owns an accounting practice and took several courses in taxation and accounting.
Janice Paine, a salesperson, was required by her employer to take a public speaking course at her own expense as a condition to retain her position.
Final Exam > Question 15
Which of the following nonbusiness investment expenses is not deductible?
The cost of a safety-deposit box rental
A subscription to an investment advisory letter
XXX The cost of travel to attend an investment seminar
Fees to an IRA custodian paid from a non-IRA account
Final Exam > Question 16
A factory building placed in service on May 1, 2015, is depreciated using the straight-line method over:
19 years
27.5 years
XXX 39 years
40 years
Final Exam > Question 17
Assuming the 2014 limit is extended for 2015, then the maximum dollar limit on the Code Sec. 179 deduction in 2015 is:
$25,000
$139,000
$250,000
XXX $500,000
Final Exam > Question 18
Which of the following is not listed property?
Cars
Computers
XXX Cellular phones
Video recording equipment
Final Exam > Question 19
Form 4562 is required to be filed in 2015 by an individual in business in all of the following situations except:
There is any vehicle depreciation reported.
There is any new amortization reported.
A Section 179 deduction is elected.
XXX No property is placed in service in 2015 by a business with no vehicle usage or new amortization to report.
Final Exam > Question 20
Edward Smith explores a business opportunity in January and February 2015. In May 2015, the business begins. It has start-up expenses of $80,000, costs for acquiring Code Sec. 197 assets of $125,000, and cost for acquiring a lease of $10,000. Which of the following expenses can be amortized?
Business start-up costs
Acquisition of Code Sec. 197 assets
Cost of acquiring a lease
XXX All of the above
Final Exam > Question 21
Deductible nonbusiness casualty losses result from each of the following except:
XXX Termite damage undetected over several years
Damage from sonic booms
Earthquake damage
Hurricane damage
Final Exam > Question 22
For a disaster loss that occurred in 2015, which of the following is not an option for the taxpayer?
Deduct the loss on a 2014 return.
Deduct the loss on a 2015 return.
XXX Deduct the loss on a 2016 return.
Apply for a quick refund.
Final Exam > Question 23
The carryback period for an ordinary net operating loss arising in 2015 is:
One year
XXX Two years
Three years
Five years
Final Exam > Question 24
All of the following statements regarding bad debts are correct except:
In order to be deductible, a nonbusiness bad debt must be entirely worthless.
To claim a bad debt deduction, the taxpayer must include a statement with the tax return containing information such as when the debt became due, collection efforts, the nature of the debt, and how the taxpayer concluded the debt was worthless.
XXX Nonbusiness bad debts are treated as long-term capital losses.
Nonbusiness bad debts are deductible in the year they become worthless.
Final Exam > Question 25
The statute of limitations for claiming a deduction for business bad debt arising in 2015 is:
One year
Two years
Three years
XXX Seven years