1. The following data is used for questions 1, 2 & 3: In the current year, Mikes AGI is $50,000. Mike has no miscellaneous itemized deductions other than the employment-related expenses listed below. Mike attends a professional trade association convention in Los Angeles. He spends three days at the meeting and two days vacationing before the meeting. Mike was unable to obtain excursion airfare rates (i.e., staying over a Saturday night) despite the fact that he was on vacation immediately before the meeting. Mikes total expenses include the following: Airfare $ 450 Meals ($50 per day) 250 Hotel ($100 per day) 500 Entertainment of customers (business is discussed) 500 Mikes employer reimburses him for the business-related expenses and, accordingly, Mike receives a reimbursement of $1,400 ($450 + 150 +300 + 500) How much can Mike deduct for employment-related expenses? (Points : 3) 950 450 1,400 1,250 2. How is the reimbursement reported on Mikes tax return? (Points : 3) 450 0 1,400 500 3. How much of the reimbursement may Mikes employer deduct? (Points : 3) 1,000 1,075 700 525 4. The following data is used for questions 4 & 5: Michelle is an employee who must use her personal automobile for employment-related business trips. During 2010, Michelle drives her car 60% for business use and incurs the following total expenses (100% use of car): Gas and oil 9,000 Repairs 1 400 Depreciation 4 700 Insurance and license fees 1 300 Michelle drives 24,000 business miles during 2010 and receives a reimbursement of 40 cents per mile from her employer. Assume that an adequate accounting is made to Michelles employer. What amount is deductible (before the 2% nondeductible floor) if Michelle elects to use the standard mileage method? (Points : 3) 12,100 2,500 2,600 12,000 5. What amount is deductible (before the 2% nondeductible floor) if Michelle uses the actual cost method? (Points : 3) 340 9,940 9,840 940