Question
1. Helen is a nurse and takes night classes at the community college. Which of the following is an incorrect statement concerning education expenses as
1. Helen is a nurse and takes night classes at the community college. Which of the following is
an incorrect statement concerning education expenses as deductible employee business
expenses?
a) Only tuition and fees are qualifying education expenses.
b) Education that qualifies the taxpayer for his first job in that field is not deductible.
c) Education that enables the taxpayer to change jobs is not deductible.
d) Education must be required by the employer or the law to keep one's salary, status, or
job, or maintain or improve skills required in his present job to be deductible.
2. Jackie is a sales representative for a cosmetic manufacturing company. During the year, she
drove 25,000 miles in total, of which 18,000 miles were for business use. She is reimbursed
under her employer's accountable plan at 30 cents per mile. Jackie wants to use the standard
mileage rate for the auto expenses if she can claim the expenses. What amount, if any, can
Jackie claim as unreimbursed employee business expenses on Form 2106 and Schedule A?
a) $5,875
b) $9,630
c) $4,230
d) $ 0
Al's father and mother were placed in a nursing home. They gave him the family farm before
their admission. The farm has been in the family for as long as his father can remember. His
father has no idea what the original purchase price of the farm was. Al's parents have made
the following improvements to the land while it was in their possession.
Installed fencing $ 6,000
Built 2 new barns $45,000
Installed a new well $ 2,250
Addition to the house $35,000
Paved driveway $ 1,100
Installed storm windows $ 3,000
The farm's Fair Market Value was $335,000 at the time of changing hands. What is Al's basis
in the farm?
a) $ 0
b) $ 83,000
c) $ 92,350
d) $335,000
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