Practicetest3 for 2018 mpatibility Mode Saved Review View HelpTell me what you w
ID: 2516255 • Letter: P
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Practicetest3 for 2018 mpatibility Mode Saved Review View HelpTell me what you want to do Design Layout References Mallings toman 13 AA Aa Noma No Spa.. Heading 1 Heading ? Titl Fand Paragraph Styles Practice Test 2 True/False Indicate whether the statement is true or false 5. Antiques may be eligible for cost recovery if they are used in a trade or business 6. For all property placed in service in 2016, the ? 179 ma 8. The wor 9. For tax purposes, "travel" is a broader classification than "transportation. 10. Amy lives and works in St. Louis. At ham. she flies to Boston, has a five-hour business meeting, and returns ximum deduction is limited to $550,000. k-related expenses of an independent contractor will be subject to the 2%-of-AGI floor I1. A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business 13. Lloyd, a practcngPAays tution to attend law school. Since a law degree involves education leading to 14. After graduating from college with a degree in chemistry, Alberto obtains a job as a chemist with DuP'ont. to St. Louis that evening at l ?pm. For tax purposes, Amy ? as away from home. and two days are spent on visiting relatives, only 60% of the airfare is deductible a new trade or business, the tuition is not deductible. Alberto's job search expenses qualify as deductions.Explanation / Answer
True/False
5. False
8. False
9. True
11. False
13. False
14. False
Multiple Choice
15. e. $37800
Gross income $38000
Less: Deduction for AGI
Penalty on early withdrawal of saving 200
AGI $ 37800
17. b. $25716
$200,000 x 10% MACRS rate = $20000
40000 x 14.29% MACRS rate = $5716
Depreciation deductions $25716
23. e. None of the above
$3,000,000 x 0.00455 = $13,650
24. e. None of the above
The max amount expensed in a year is limited to lesser of taxable income or $5,00000
Additional 1st year depreciation [650,000 - 400,000]x0.50 = 125000
MACRS cost recovery ($125000 x 0.05) = 6250
Total = $131,250
Income from business before cost recovery $400,000
Less: Total cost recovery $131,250
Business income = $268,750
Total cost recovery deduction is 631250 (500000+131250)
27. a. corey sets the work schedule
29. e. None of the above
Parking is claimed
30. a. Dr. Jones, a general dentist, attends a two day seminar on developing a dental practice.
31. C. $3100
$3100 Peggy did not meet either 7 days (or less) or less than 25% personal use exception for foreign travel.
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