【導讀】9-1. CHAPTER9. Status:Q/P. TRUEORFALSE. rulingprocedures. standarddeduction. limitation. costmethod. requirement. expenses. Status:Q/P. business. promotion. results. deductionclaimed. gifts. userequirement. 43Office

　　

【正文】 . The cutback adjustment for meals and entertainment applies to employees who are subject to regulation by the . Department of Transportation. ANS: T The adjustment applies, but at a reduced rate. PTS: 1 DIF: 1 REF: p. 919 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 35. Crow Corporation pays for a trip to Bermuda for its two top salespersons. This expense is subject to the cutback adjustment. ANS: F The cost of the trips to Bermuda are additional pensation to the employees involved. Consequently, they are not subject to the cutback adjustment and are fully deductible by Crow Corporation. They are also taxed as ine to the employees. PTS: 1 DIF: 1 REF: Example 31 OBJ: 6 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 36. Mallard Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains. The cost of operating the cafeteria is not subject to the cutback adjustment. ANS: T PTS: 1 DIF: 1 REF: Example 32 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 37. Every year, Penguin Corporation gives each employee a fruit basket and a bottle of wine at Christmas. These gifts are not subject to the cutback adjustment. ANS: T PTS: 1 DIF: 1 REF: Example 33 OBJ: 6 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min Deductions: Employee and SelfEmployedRelated Expenses 913 38. A taxpayer takes six clients to an NBA playoff game. If all of the tickets (list price of $120 each) are purchased on the Inter for $1,800 ($300 each), only $60 ($120 ? 50% cutback adjustment) per ticket is deductible. ANS: T PTS: 1 DIF: 1 REF: Example 37 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 39. Ethan, a bachelor with no immediate family, uses the Pine Shadows Country Club exclusively for his business entertaining. All of Ethan’s annual dues for his club membership are deductible. ANS: F Dues to country clubs are not deductible. PTS: 1 DIF: 1 REF: Example 36 OBJ: 6 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 40. A sole proprietor is not allowed a deduction for a $25 gift he gives to his office manager on her birthday. ANS: F Gifts to employees qualify for deduction. PTS: 1 DIF: 1 REF: p. 922 OBJ: 6 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 41. In the case of an office in the home deduction, the exclusive business use test does not apply when the home is used as a daycare center. ANS: T Mixed use (., business and personal) of the home is permitted in daycare situations. PTS: 1 DIF: 1 REF: Example 40 OBJ: 7 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 42. If a taxpayer does not own a home but rents an apartment, the office in the home deduction is not available. ANS: F The only difference would be a substitution of rent expense for depreciation. Otherwise, the deduction is equally available. PTS: 1 DIF: 1 REF: p. 923 OBJ: 7 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 43. A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction. ANS: F The office in the home deduction will be allowed if the taxpayer is selfemployed. PTS: 1 DIF: 1 REF: Example 41 OBJ: 7 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 44. The portion of the office in the home deduction that exceeds the ine from the business can be carried over to future years. 914 2020 Comprehensive Volume/Test Bank ANS: T PTS: 1 DIF: 1 REF: Example 41 OBJ: 7 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 45. If the cost of uniforms is deductible, their maintenance cost (., laundry, dry cleaning, alterations) also is deductible. ANS: T PTS: 1 DIF: 1 REF: p. 924 OBJ: 7 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 46. After graduating from college with a degree in chemistry, Alberto obtains a job as a chemist with DuPont. Alberto’s job search expenses qualify as deductions. ANS: F Job search expenses incurred in obtaining the first job are not deductible. PTS: 1 DIF: 1 REF: p. 925 OBJ: 7 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 47. Job search expenses are not deductible unless the taxpayer actually changes jobs. ANS: F No such requirement exists. PTS: 1 DIF: 1 REF: p. 925 OBJ: 7 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 48. Madison is an instructor of fine arts at a local munity college. If she spends $600 on art supplies for her classes, $250 of this amount can be claimed as a deduction for AGI. ANS: F The $250 special rule for school supplies applies only to elementary and secondary school teachers. PTS: 1 DIF: 1 REF: p. 925 OBJ: 7 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 49. Both traditional and Roth IRAs possess the advantage of taxfree accumulation of ine within the plan. ANS: T In the case of a traditional IRA, however, the ine will be taxed when distributed to the participant. PTS: 1 DIF: 1 REF: p. 926 OBJ: 8 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 50. When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from a the IRA, however, are fully taxed. Deductions: Employee and SelfEmployedRelated Expenses 915 ANS: T Contributions are deductible, while distributions are taxable. PTS: 1 DIF: 1 REF: p. 926 OBJ: 8 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 51. Although a 167。 401(k) plan avoids taxation on any employer contributions, any ine earned on such contributions is taxed yearly. ANS: F Earnings on 167。 401(k) plans are tax deferred until distributions are received. PTS: 1 DIF: 1 REF: p. 926 | Example 43 OBJ: 4 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min