Question 1: During the year, Kirk travels from Trenton to Oslo (Norway) on business. His time was spent as follows: 2 days travel (one day each way), 2 days business, and 2 days personal. His expenses for the trip were as follows (meals and lodging reflect only the business portion):
Air fare $3,300
Lodging 900
Meals and entertainment 1,500
Presuming no reimbursement, Kirk's deductible expenses are:
a. $5,700.
b. $4,950.
c. $3,850.
d. $2,750.
e. None of the above.
Question 2: Carolyn is single and has a college degree in finance. She is employed as a loan officer at a bank; her yearly AGI approximates $50,000. During 2006, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $3,900 (tuition), $300 (books), $200 (other school supplies), and $200(transportation to and from campus). Disregarding the 2%-of-AGI limitation, as to the MBA program, Carolyn has a:
a. Deduction for and deduction from AGI of $0.
b. Deduction for AGI of $3,900 and deduction from AGI of $700.
c. Deduction for AGI of $4,000 and deduction from AGI of $600.
d. Deduction for AGI of $4,100 and deduction from AGI of $500.
e. None of the above.
Question 3: Dan entertains several of his clients on January 1 of the current year. Expenses paid by Dan are as follows:
Cab fare $ 60
Cover charge at supper club 150
Dinner at club 330
Tips to waiter 70
Presuming proper substantiation, Dan's deduction is:
a. $230.
b. $260.
c. $305.
d. $335.
e. None of the above.
Question 4: Which of the following expenses, if any, qualify as deductible?
a. Contribution to a Roth IRA.
b. Costs involved in maintaining an office in the home by a self-employed insurance adjuster. Taxpayer's wife also uses the office as a meeting place for her bridge club.
c. Cost of moving to first job location. Taxpayer just graduated from college.
d. Job hunting expenses of a fishing guide to become an insurance salesman.
e. None of the above.
Question 5: Roger is employed as an actuary. For calendar year 2007, he had AGI of $130,000 and paid the following medical expenses:
Medical insurance premiums $5,300
Doctor and dentist bills for Derrick and Jane (Roger's parents) 7,900
Doctor and dentist bills for Roger 5,100
Prescribed medicines for Roger 830
Nonprescribed insulin for Roger 960
Question 6: Derrick and Jane would qualify as Roger's dependents except that they file a joint return. Roger's medical insurance policy does not cover them. Roger filed a claim for $4,800 of his own expenses with his insurance company in November 2007 and received the reimbursement in January 2008. What is Roger's maximum allowable medical expense deduction for 2007?
a. $9,750.
b. $10,340.
c. $19,130.
d. $20,090.
e. None of the above.