Question : 51. Jack a lawyer who a member at Ocean Spray Country : 1313515

 

51. Jack is a lawyer who is a member at Ocean Spray Country Club where he spends $7,200 in dues, $4,000 in meals, and $2,000 in green fees to entertain clients. He is also a member of the local Rotary club where he meets potential clients. The dues for the Rotary club are $1,200 a year. How much of the above expenses can Jack deduct as business expenses?

a. $4,200

b. $6,000

c. $7,200

d. $14,400

e. None of the above

52. Linda is self-employed and spends $600 for business meals and $1,000 for business entertainment in 2014. What is Linda allowed to deduct in 2014 for these expenses?

a. $200

b. $500

c. $800

d. $1,000

e. None of the above

53. Choose the correct statement:

a. If a taxpayer does a lot of business travel, the taxpayer may deduct the amount paid for an airline club membership.

b. Membership dues to a golf club are deductible as long as there is a business purpose.

c. In order to be deductible, dues and subscriptions must be related to the taxpayer’s occupation.

d. If a financial planner becomes certified, then he/she may not deduct the Certified Financial Planner (CFP) dues because it is not necessary to be certified in order to engage in the business of being a financial planner.

54. In which of the following situations may the taxpayer take an education expense on Schedule C?

a. John, a plumber by trade, is taking classes to qualify as an electrician so he may become a more well-rounded plumber.

b. Henry, an administrative assistant, is taking an advanced Word computer program class through an adult school program.

c. Barbie is flying on numerous commercial airplanes in order to observe the flight attendants so that she may improve her public relations skills.

d. Ann Marie is taking a review course in order to pass the certified financial planner examination.

55. Choose the correct answer.

a. Education expenses are deductible on Schedule C even if the education qualifies the taxpayer for a new trade or business.

b. Expenses required for education to maintain skills for the taxpayer’s current business are not deductible.

c. The cost of a CPA review course is deductible by a bookkeeper on his Schedule C.

d. Expenses for travel as a form of education are not deductible.

56. Which of the following is deductible as dues, subscriptions or publications?

a. Dues to a health club for a doctor

b. Subscription to “Vogue” magazine for a corporate president

c. Dues to the drama club for a student

d. Subscription to the “Journal of Taxation” for a tax attorney

e. None of the above

57. Which of the following does not give rise to a business expense for uniforms or special clothing?

a. An accountant buys a business suit.

b. A mascot buys his costume.

c. A baseball player buys his team uniform.

d. A scientist buys his hazmat suit.

e. All of the above are deductible.

58. To be deductible as the cost of special work clothing or uniforms:

a. The clothing must not be suitable for everyday use and must be required as a condition of the job.

b. The clothing must be required as a condition of the job, but can also be suitable for everyday use.

c. The clothing need not be required as a condition of the job, but must not be suitable for everyday use.

d. Only the cost of the clothing is included; upkeep is not deductible.

59. Sue is a small business owner who often gives gifts to clients. She gives a $40 gift to her client, Mr. Smith, and his wife. Sue spent $6 to wrap the gift. She also gave out 400 calendars with her company name on them. Each calendar cost $1. Sue also gave her secretary a $370 watch for his 10 years of service. How much of the above expenses may she deduct?

a. $816

b. $446

c. $795

d. $801

e. None of the above

60. Nancy owns a small dress store. During 2014, Nancy gives business gifts having the indicated cost to the following individuals: 

Mrs. Johns (a customer)$37 plus $3 shipping

Mr. Johns (nonclient husband of Mrs. Johns)$10

Ms. Brown (a customer)$22

What is the amount of Nancy’s deduction for business gifts?

a. $0

b. $50

c. $53

d. $62

e. None of the above

 

 

 

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