1] Justin Peter earned a salary of $30,000 during the current year. During the current year, he was required by his employer to take several overnight business trips, and he received an expense allowance of $1,500 for travel and lodging. In the course of these trips, he incurred the following expenses:

Travel $1,100 Lodging 500 Entertainment of customers 400

What is Justin's adjusted gross income if he does not account to his employer for the expenses?

A. $29,500 B. $29,900 C. $30,000 D. $31,500

[3] With regard to employer reimbursements under an accountable plan, which of the following statements is false?

A. The expenses must have been paid or incurred while performing services as an employee. B. The expenses must be adequately accounted for to the employer within a reasonable period of time.

C. Any excess reimbursement must be returned within a reasonable period of time.

D. Any reimbursement paid must be based on a fixed daily amount not to exceed the government's per diem rate.

[4] John offers his beach cottage for rent from June through August 31 (92 days). His family uses the cottage during the last 2 weeks in May (15 days). He was unable to find a renter for the first week in August (7 days). The person who rented the cottage for July allowed him to use it over a weekend (2 days) without any reduction in, or refund of, rent. The cottage was not used at all before May 16 or after August 31. Total income received was $11,000. Total expenses were $4,000. What percentage of the expenses for the cottage can John deduct as rental expenses?

A. 25% B. 83% C. 85% D. 100%

[7] Mr. Smith, a cash-basis, calendar-year taxpayer, owns a duplex. He lives in one unit and rents the other unit to an unrelated individual. The two units are approximately equal in size. On July 1, Year 1, Mr. Smith paid the property insurance on the duplex for the 3-year period July 1, Year 1, through June 30, Year 4. The total premium was $360. For Year 1, Mr. Smith's rental expense for this insurance policy is

A. $30 B. $60 C. $120 D. $360