17) 17) One of the criteria to be satisfied in order for a business to deduct an expense is that the expense be "necessary." In applying this standard, case law has determined that necessary means A) appropriate and helpful to the business. B) indispensable if the business is to succeed. C) mandated by law. D) none of the above. 21) 21) David acquired an automobile for $30,000 for use in his unincorporated business at the beginning of 2021 and used the standard mileage rate method in 2021. He plans to switch to the actual expense method for 2022. The automobile was used 25,000 miles for business purposes in 2021. What is the amount of the adjusted basis of the automobile for purposes of computing depreciation in 2022? A) $30,000 B) $16,000 C) $23,750 D) $23,500 22) 22) Tyne is a 48-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan. Before IRA contributions, her AGI is $68,000 in 2021. What is the maximum amount she may contribute to a tax deductible IRA? A) $7,000 B) $ 0 C) $6,000 D) $4,800 30) 30) The amount realized by Matt on the sale of property to Caitlin includes all of the following with the exception of A) mortgage on the property that is assumed by Caitlin. B) the FMV of any other property received by Matt in the transaction. C) mortgage on the property paid off by Matt prior to the sale. D) cash received by Matt. 39) 39) Hannah is a 52-year-old an unmarried taxpayer who is not an active participant in an employer-sponsored qualified retirement plan. Before IRA contributions, her AGI is $68,000 in 2021. What is the maximum amount she may contribute to a tax deductible IRA? A) $7,000 B) $6,000 C) $4,800 D) $5,600 40) 40) Tessa is a self-employed CPA whose 2021 net earnings from her business (before the H.R. 10 plan contribution but after the deduction for one-half of self-employment taxes) is $400,000. What is the maximum contribution that Tessa can make on her behalf to her H.R. 10 (Keogh) plan in 2021? A) $80,000 B) $100,000 C) $70,000 D) $58,000 46) 46) All of the following may deduct education expenses except A) Paige is an self-employed accountant who incurs expenses to take advanced tax courses. B) Marvin is a high school teacher who incurs expenses for education courses to meet new course requirements to maintain his job. C) Richard is a self-employed dentist who incurs expenses to attend a convention on new techniques in oral surgery. D) Hope is an independent business consultant who incurs expenses to pursue an MBA degree. 49) 49) Amanda, a single taxpayer, reports $200,000 of taxable income in 2021. Included in her taxable income is a NSTCL of $25,000, a $30,000 LTCG from sale of a rare coin held 15 months and a $18,000 LTCG from the sale of stock held for three years. By what amount will Amanda's tax liability increase? A) $4,100 B) $4,300 C) $5,880 D) $3,450
