1.One indicator of whether an activity is considered a business, or a hobby is the presumption of a profit (i.e., a profit motive).An activity is presumed to be carried on for a profit if it produces a profit in at leastXXof the last 5 tax years?

Choose one answer.

a.2b.3c.4d.5

Question

2

True or False- A single 1099 isallthat is needed toprove business existence?

Choose one answer.

a.True b.False

Question

3

Taxpayer brings in a list of expenses and a monthly breakdown of income, written on a sheet of paper. Which form should be used to document the Schedule C?

Choose one answer.

a.Net Profit Worksheet b.Reconstruction Worksheet(s)c.Reconstruction Worksheet(s) and a documented interview d.None- the taxpayers support is sufficient

Question

4

Which of the following can be used to document Schedule C income?

Choose one answer.

a.1099(s)b.Appointment books, calendars, or schedules listing dates of service and amounts received c.Sales receipts, bank records or deposit slips d.Any of the above

Question

5

True orFalse-A taxpayer can claim vehicle insurance costs and the standard mileage rate.

Choose one answer.

a.True b.False

Question

6

Marks: 1

Complete the calculation for both Actual Vehicle Expense and the Standard Mileage rate(57.5/mile):

Total Miles = 25,000

Business Miles = 12,500

Personal Use Miles = 12,500

Gas = $1,664 for the year

Insurance = $154 monthly

Tires= $600

Oil Changes= 4 at $40 each

Vehicle Registration Fees = $240

Tollsincurred during business activity= $360

Actual Vehicle Expense = _____________________

Standard Mileage Deduction = _________________

Choose one answer.

a.$4,872 Actual and $14,735 Standard b.$2,616 Actual and $7,548 Standard c.$3,348 Actual and $7,368 Standard d.$2,856 Actual and $14,555 Standard

Question

7

Marks: 1

True orFalse- Rideshare Drivers (such as Uber/Lyft) can deducttheir personalmeals purchased during their shift?

Choose one answer.

a.True b.False

Question

8

True or False- A returning client comesintothe office to file their taxes which has always in included a Schedule C for a landscaping business. Because they are a repeat client, they do notneedto prove business existence.

Choose one answer.

a.True b.False

Question

9

A tax preparerworks with areturningclientto reconstruct their business income and expense.During the reconstruction, the client provides all of theircustomer'snames and contact information as well as the amount eachcustomerpaid to determine the total amount of income.Theclientalso has an Additional Child Tax Credit on the return.Has the documentation for proof of business existence been satisfied?

Choose one answer.

a.Yes, customer names and contact information is sufficient since there are multiple customers listed b.Yes, client is a returning client and tax preparer has firsthand knowledge that the business exists c.No, customer contact information is not an approved form of documentation for business existence d.No, customer contact information is an approved form of documentation for business existence, but a second item is also necessary

Question

10

1

True orFalse- A taxpayer runs a childcare business and is also an artist.These businesses cannot be combined on one Schedule C.

Choose one answer.