Submitted by: Submitted by drspivey2
Views: 251
Words: 1317
Pages: 6
Category: Other Topics
Date Submitted: 12/11/2013 08:47 PM
1. Depreciation ends when depreciable property is taken out of service. All of the following events will stop the depreciation of a machine EXCEPT:
o The sale or exchange of the machine.
o Abandonment of the machine.
o Lack of a market for the product the machine is used to make.
o The machine is destroyed in a fire.
2. Which of the following is NOT a test for an employee business expense?
o The expense must be paid or incurred during the employee's tax year.
o The expense must be for the employee's convenience.
o The expense must be incurred because the taxpayer is an employee.
o The expense must be ordinary and necessary.
3. Which of the following military expenses is NOT deductible?
o Insignia of rank.
o Travel expenses when working as a courier.
o Haircut when required by military regulations.
o Reserve component uniforms, if the taxpayer can wear the uniforms only while performing duties as a reservist.
4. In regard to combat zone pay, military members may:
o Elect to include it as earned income when calculating the Earned Income Credit.
o Exclude it from taxable income if they remain in a combat zone for at least one month.
o Exclude it from income for purposes of the Additional Child Tax Credit.
o Carry over excluded income to be treated as earned income for up to two years.
5. How does depreciation impact basis?
o Depreciation decreases basis.
o Depreciation increases basis.
o Basis is not impacted by depreciation.
o None of the above.
6. If a taxpayer has taxable income from cancellation of a business debt in a non-farm rental activity, where would the income be reported?
o Form 1040, line 21.
o Form 1040, Schedule F, line 10.
o Form 1040, Schedule E, line 3b.
o Form 1040, Schedule C, line 6.
7. In which case below will the taxpayer be able to exclude all income from their cancelled debt?
o A client: Received a Form...