Reference no: EM13864712

Question :

1. Mason performs services for Isabella. In determining whether Mason is an employee or an independent contractor, comment on the relevance of each of thefactors listed below.

a. Mason performs services only for Isabella and does not work for anyone else.

b. Mason sets his own work schedule.

C. Mason report his job- related expenseson a Schedule C.

d. Mason obtained his job skills from Isabella's training program

e. Mason performs the services at Isabella's business location.

f. Mason is paid based on time worked rather than on task performed.

2. In each of the following situations, indicate whether there is a cutback adjustment.

a. Each year, the employer awards its top salesperson an all expense-paid trip to Jamaica.

b. The employer has a cafeteria for its employees where meals are furnished at cost.

c. The employer sponsors an annual Labor Day picnic for its employees.

d. Every Christmas, the employer gives each employee a fruitcake.

e. The taxpayer, an airline pilot, pays for meals and lodging during a layover between flights.

f. The taxpayer pays a cover charge to take key clients to a nightclub.

g. The taxpayer gives business gifts to her clients at Christmas.

h. The taxpayer purchases tickets to take clients to an athletic event.

3. Comment on the deductibility of each of the following items:

a. Club dues for the Coronado Club. Taxpayer, a lawyer, uses the luncheon club exclusively for business.

b. Cost of dry cleaning uniforms (including alterations by a tailor). The taxpayer is the doorman at a New York City hotel.

c. Expenses incurred by the taxpayer, a member of the Maine National Guard, to participate in a two-day training session conducted in New Jersey.

d. Union dues paid by a self-employed carpenter.

e. Cost of CPA exam review course paid by a self-employed accountant.

4. Charles has AGI of $94,000 during the year and the following expenses related to his employment:

Lodging while in travel status $5,000

Meals during travel 4,000

Business transportation 6,000

Entertainment of clients 3,800

Professional dues and subscriptions 800

Charles is reimbursed $14,000 under his employer?s accountable plan. What are his deductions for and from AGI

5. Complete the following table by classifying each of the independent expenditures (assme that no reimbursement takes place).

Expense item Deductible for AGI Deductible From AGI Net Deductible

Moving expense of an employee

Tax return preparation fee incurred by and employed plumber

Safety glasses purchased by an employed pipefitter

Dues to auto club (aaa) for taxpayer who uses the automatic mileage method

Nursing refresher course for taxpayer who retired from nursing five years ago

Gambling loss not in excess of gambling gain by a self-employed architect

Contribution to Roth Ira by a self-employee attorney

Business travel expenses by a statutory employee

Job hunting expense by an elementary school teacher seeking a position as an elementary school principal

Cost of bar exam review course taken by a recent law school graduate