Part 1 Multiple Choice Section 35 Questions 2 Points Each The Purpose Of This Part Of The Test Is To Assess Your Tax Sk 1 (54.69 KiB) Viewed 31 times
Part 1 Multiple Choice Section 35 Questions 2 Points Each The Purpose Of This Part Of The Test Is To Assess Your Tax Sk 2 (45.67 KiB) Viewed 31 times
Part 1: Multiple Choice Section-35 questions 2 points each-The purpose of this part of the test is to assess your tax skills, review your knowledge of tax vocabulary, and to analyze your ability to solve client problems. 1. Your client Amy is a Schedule C sole proprietor with a business which prints signs, has decided to take her major client out to lunch to try and convince him to increase the number of signs he purchases. All of the following statements concerning the lunch are correct, except a. Amy can deduct tickets to the theatre if she takes him out to entertain him after the meal. b. Amy can normally deduct only 50% of the meal (a 100% deduction exception is allowed this year). c. Amy passes the "directly related to" test. d. Amy would not be allowed any deduction if she was not at the meal (she must be present at the meal to get a deduction). 2. Which of the following statements correctly defines the "associated with" test? a. It applies to the deduction of business meals if there is a clear business purpose for having the meal and business was conducted before, during, or after the meal. b. It applies to the deduction of interest associated with the purchase of a primary residence. c. It applies to the deduction of medical expenses purchased in a pharmacy. d. It applies to the deduction of state and local (SALT) taxes. 3. Which of the following statements about education expenses is (are) correct? 1. They are deductible if they are paid to meet the minimal education requirements of the job. II. They are deductible if they are paid to qualify the client for a new trade or business a. I only b. II only c. Both I and II d. Neither I nor II 4. Your client Barbara has the following medical expenses. She pays $2,000 in medical premiums for insurance. She pays $1,000 in deductibles for her medicines. She pays $2,000 for dental work. How much of her medical expenses are deductible on Schedule A if she has an adjusted gross income of $100,000? a. $5,000 b. $4,500 c. $0 d. None of the above.
5. Your client Carl losses his leg in a car accident. All of the following statements concerning his medical deductions are correct, except: He will be able to deduct expenses for cosmetic surgery if he has to fix his nose that was not injured in the car accident. b. He must capitalize the cost of a ramp put on his house to enable him to bring his wheelchair in the front door. C. He must capitalize the lowering of his kitchen counters and cabinets to accommodate the fact that he is in a wheelchair. d. He may be able to deduct travel to a hospital in another state to be fitted for a wooden leg. 6. Which of the following are considered deductible medical expenses? I. The premiums paid for health insurance. II. Items purchased for an upset stomach (e.g., Rolaids and Tums). a. I only. b. II only c. Both I and II d. Neither I nor II 7. Your client Kevin has decided to implement the Health Savings Account (HSA) Strategy. Which of the following statements about this strategy is correct? a. Kevin will be able to contribute funds to the HSA on a before-tax basis and take out funds in retirement tax free so long as they are used to pay for current or prior medical expenses. b. Kevin can implement this strategy even if he never has access to a high-deductible health plan. c. Kevin should consider using the HSA to pay for current medical expenses. d. Kevin can use the funds from his HSA to pay for education expenses and the funds will be received tax free. 8. Which of the following statements about the Health Savings Account (HSA) Strategy is (are) correct? I. There is a three-year lookback period to pay for medical expenses. Earnings on invested HSA funds may never be taxed. II. a. I only 6. II only c. Both I and II d. Neither I nor II 3 دیا
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