Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 3, Problem 21MCQ
To determine
Concept Introduction:
Deductions are the allowances given to the taxpayer as a deduction from the gross income to calculate the taxable income. Every deduction has some conditions and limits of the amount. Deductions can be for business or personal expenses.
To choose:The taxpayer qualified for a home office deduction.
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Which of the following statements regarding deductions for home office expenses is true?
A.Deductions may be taken only if the home office is used for the taxpayer’s main business.
B.Deductions may be claimed for regular use of a part of the home that is also used regularly by other family members for meals or homework.
C.Deductions may be claimed if the taxpayer chooses to work from home in the evenings after spending the day in his office provided by his employer.
D.Deductions may be taken if the home office is used regularly for meeting clients or customers in the normal course of the taxpayer’s business.
Which of the following describes a taxpayer with a hobby?
a) Sara, an independent seller for a cosmetics company, who sells products to friends and neighbors because she enjoys learning about the new products available. She maintains separate business and personal accounts and keeps meticulous business records.
b) Craig, a taxpayer who builds model trains. He occasionally wins cash prizes in local train modeling contests. He deposits his winnings into his personal checking account.
c) Everett, a university research associate, who had made profits on his research activities in the past and fully expects to do so in the future.
d) Gail, a taxpayer who writes travel articles. She visits each location only after she has a valid contract with a publisher and keeps her business and personal accounts separate. Her travel expenses and earnings are in line with the earnings and expenses of other travel writers.
Which of the following describes a taxpayer with a hobby?
Sara, an independent seller for a cosmetics company, who sells products to friends and neighbors because she enjoys learning about the new products available. She maintains separate business and personal accounts and keeps meticulous business records.
Craig, a taxpayer who builds model trains. He occasionally wins cash prizes in local train modeling contests. He deposits his winnings into his personal checking account.
Everett, a university research associate, who had made profits on his research activities in the past and fully expects to do so in the future.
Gail, a taxpayer who writes travel articles. She visits each location only after she has a valid contract with a publisher and keeps her business and personal accounts separate. Her travel expenses and earnings are in line with the earnings and expenses of other travel writers.
Chapter 3 Solutions
Income Tax Fundamentals 2020
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Which of the following formulas represents the...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Heather drives her minivan 953 miles for business...Ch. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Under the high-low method, the federal per diem...
Ch. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - Prob. 20MCQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - Prob. 23MCQCh. 3 - Stewie, a single taxpayer, operates an activity as...Ch. 3 - Prob. 2PCh. 3 - Lawrence owns a small candy store that sells one...Ch. 3 - Business with gross receipts of $25 million or...Ch. 3 - Teresa is a civil engineer who uses her automobile...Ch. 3 - Prob. 7PCh. 3 - Martha is a self-employed tax accountant who...Ch. 3 - Prob. 9PCh. 3 - Go to the U.S. General Services Administration...Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Marty is a sales consultant. Marty incurs the...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Cooper and Brandy are married and file a joint...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Cindy operates a computerized engineering drawing...Ch. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Lew is a practicing CPA who decides to raise...
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