Individul Income Tax Concepts Statutory employees: a Report their expenses on Form 2106 b Include co

Individul Income Tax Concepts Statutory employees:

a Report their expenses on Form 2106

b Include common law employees

c Are subject to income tax withholdings

d Claim their expenses as deductions for AGI

e None of the above

Felicia works as an auditor for a large major CPA firm
During the months of October and November of each year, she is permanently
assigned to the team auditing Teal Corporation As a result, every day she
drives from her home to Teal and returns home after work Mileage is as


Home to office 15

Home to Teal 40

Office to Teal 22

For these two months, Felicia’s deductible mileage for each
workday is:

a 0

b 22

c 40

d 80

e None of the above

Bill is the regional manager for a national chain of
auto-parts stores and is based in Salt Lake City When the company opens new
stores in Boise, Bill is given the task of supervising their initial operation
For three months, he works weekdays in Boise and returns home on weekends He
spends $410 returning to Salt Lake City but would have spent $390 had he stayed
in Boise for the weekend As to the weekend trips, how much, if any, qualifies
as a deduction?

a $0, since the trips are personal and not work related

b $0, since Bill’s tax home has changed from Salt Lake City
to Boise

c $390

d $410

e None of the above

Allowing for the cutback adjustment (50% reduction for meals
and entertainment), which of the following trips, if any, will qualify for the
travel expense deduction?

a Dr Jones, a general dentist, attends a two-day seminar
on developing a dental practice

b Dr Brown, a 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 None of the above

During the year, Hugh went from Cleveland to Fairbanks on
business Preceding a five-day business meeting, he spent four days vacationing
at a dude ranch Excluding the dude ranch costs, his expenses for the trip are:

Air fare $1,800

Lodging 600

Meals 500

Entertainment 300

Presuming no reimbursement, deductible expenses are:

a $3,200

b $3,050

c $2,800

d $1,900

e None of the above

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