10. Tom Smith entertains one of his clients and pays the following expenses:

	Cab fare	22
	Cover charge	10
	Meal	110
	Tip to food server	20

Assuming the necessary documentation exists, how much may Tom deduct?

a. $92

b. $107

c. $162

d. $81

e. the amount is $_______.

11. The maximum business expense deduction for gifts to customers and clients is:

a. $4.

b. $10.

c. $75.

d. $25.

e. No maximum amount exists.

12. A self-employed taxpayer buys a new business automobile during the year. What method is permitted in computing car and truck expenses on Schedule C?

a. The actual expense method

b. The standard mileage method

c. Either the actual expense or the standard mileage method

d. The actual mileage method

e. None of the above

13. Which of the following income items is treated as earnings from self-employment?

a. Compensation received by a registered nurse who is hired by a patient to provide private nursing services

b. Dividends

c. Capital gain from the sale of an investment

d. Compensation received by a babysitter who provides child care in the parent's home

e. All of the above are earnings from self-employment