____ 1. B works for AC Manufacturing Co. as a janitor. Due to new federal regulations regarding plant safety, AC has required that all janitors take a night class in occupational safety at a local trade school. Although B would be happy to take the class and keep his current position, he has learned that by completing the course he will be eligible to be considered for a supervisory janitor position. B wants to deduct the cost of attending the night school class, which is reimbursed to him under an accountable plan and included in his wages. Which statement best describes the deductibility of the cost?

a. B may not deduct the cost of the night school class if the supervisory position is considered a change in duties.

b. B may not deduct the cost of the night school class if it is not necessary to meet the minimum educational requirements of B's trade or business.

c. B may not deduct the cost if the education qualifies B for a new trade or business.

d. B may not deduct the cost if the education merely maintains his current skills.

____ 2. The costs of which one of the following are valid deductible educational expenses (assume an employee could deduct these expenses FOR AGI)?

a. A college or vocational course necessary to be considered for a job.

b. A professional continuing educational program that qualifies the taxpayer for a new job.

c. Professional development courses required by an employer for retaining a position.

d. A tax seminar attended for reasons unrelated to one's present job.

____ 3. Which of the following statements is true regarding meals and entertainment expenses?

a. Bob, a self-employed CPA, takes a client to the Red Sox game, where they discuss business. The cost of the tickets is 50% deductible.

b. Joe, an employee, takes a customer to lunch and they have a valid business discussion. Joe is not reimbursed by his employer. Joe can deduct 50% of the cost of the meal.

c. Mary is self-employed. She takes a client to dinner and a concert. They have a business discussion at dinner. She can deduct 50% of the dinner and none of the concert.

d. Emily is self-employed. She takes a customer to lunch where they discuss business. Then they play tennis. She can deduct 50% of the both the lunch and the cost of tennis.

e. Maria is an employer who provides her employees with free breakfast and lunch in the company cafeteria. This expense is not deductible.