TAX 4001 exam 2 cram
12 month rule - ANS-business can immediately deduct a prepayment if
contract doesn't last more than 1 year from 1st date of benefit
contract doesn't extend beyond the end of the taxable year following the tac year in
which the taxpayer makes a payment
2 criteria for medical expenses to be deductible - ANS-expenses paid during the year
expense for taxpayer, spouse, or dependent
2 methods computing automobile transportation expenses - ANS-actual cost method
automatic mileage method
2 ways to calculate home office deduction - ANS-regular method
simplified method
3 general categories of intangible assets - ANS-goodwill and covenants not to compete
(section 197 purchases intangibles)
business investigation expenses and start up costs
research and experimentation costs
4 reasons commuting expenses are deductible - ANS-commuting from job site to job
site
commuting to/from temp work place
commuting between 2 jobs
commuting with tools
4 things that must be knows to compute MACRS - ANS-asset's original costs
, asset's recovery period
applicable depreciation method
applicable depreciation convention
A casualty loss results from an event that's _____, _____, and _____. - ANS-identifiable
damaging to property
sudden, expected, and unusual in naturev
A charitable donation needs to be _____ with written records. - ANS-substantiated
actual cost method - ANS-includes the actual cost for gas, oil, repairs, insurance,
depreciation or leas payments, tolls, and any other expense directly connected to the
car
allowable cost recovery - ANS-cost recovery that could have been taken
allowed cost recovery - ANS-cost recovery actually taken
amortization - ANS-cost recovery for intangible property
amortization convention for goodwill and covenants not to compete (section 197
purchases intangibles) - ANS-full month convention
Are deduction for qualified tuition and related expenses allowed for taxpayers spouse
and dependents? - ANS-yes
Are employees allowed a home office deduction from 2018 - 2025? - ANS-no
Are nonbusiness bad debts allowed for lender's trade or business (like loans to friends)?
- ANS-no
automatic mileage method - ANS-56 cents per mild x number of miles + parking + tolls
bonus depreciation - ANS-taxpayers may immediately expense 100% of qualifying
property
12 month rule - ANS-business can immediately deduct a prepayment if
contract doesn't last more than 1 year from 1st date of benefit
contract doesn't extend beyond the end of the taxable year following the tac year in
which the taxpayer makes a payment
2 criteria for medical expenses to be deductible - ANS-expenses paid during the year
expense for taxpayer, spouse, or dependent
2 methods computing automobile transportation expenses - ANS-actual cost method
automatic mileage method
2 ways to calculate home office deduction - ANS-regular method
simplified method
3 general categories of intangible assets - ANS-goodwill and covenants not to compete
(section 197 purchases intangibles)
business investigation expenses and start up costs
research and experimentation costs
4 reasons commuting expenses are deductible - ANS-commuting from job site to job
site
commuting to/from temp work place
commuting between 2 jobs
commuting with tools
4 things that must be knows to compute MACRS - ANS-asset's original costs
, asset's recovery period
applicable depreciation method
applicable depreciation convention
A casualty loss results from an event that's _____, _____, and _____. - ANS-identifiable
damaging to property
sudden, expected, and unusual in naturev
A charitable donation needs to be _____ with written records. - ANS-substantiated
actual cost method - ANS-includes the actual cost for gas, oil, repairs, insurance,
depreciation or leas payments, tolls, and any other expense directly connected to the
car
allowable cost recovery - ANS-cost recovery that could have been taken
allowed cost recovery - ANS-cost recovery actually taken
amortization - ANS-cost recovery for intangible property
amortization convention for goodwill and covenants not to compete (section 197
purchases intangibles) - ANS-full month convention
Are deduction for qualified tuition and related expenses allowed for taxpayers spouse
and dependents? - ANS-yes
Are employees allowed a home office deduction from 2018 - 2025? - ANS-no
Are nonbusiness bad debts allowed for lender's trade or business (like loans to friends)?
- ANS-no
automatic mileage method - ANS-56 cents per mild x number of miles + parking + tolls
bonus depreciation - ANS-taxpayers may immediately expense 100% of qualifying
property
