Part 1: Multiple Choice Section-35 questions 2 points each-The purpose of this part of the test is to assess your tax skills, review your knowledge of tax vocabulary, and to analyze your ability to solve client problems. 1. Your client Amy is a Schedule C sole proprietor with a business which prints signs, has decided to take her major client out to lunch to try and convince him to increase the number of signs he purchases. All of the following statements concerning the lunch are correct, except a. Amy can deduct tickets to the theatre if she takes him out to entertain him after the meal. b. Amy can normally deduct only 50% of the meal (a 100% deduction exception is allowed this year). c. Amy passes the "directly related to" test. d. Amy would not be allowed any deduction if she was not at the meal (she must be present at the meal to get a deduction). 2. Which of the following statements correctly defines the "associated with" test? a. It applies to the deduction of business meals if there is a clear business purpose for having the meal and business was conducted before, during, or after the meal. b. It applies to the deduction of interest associated with the purchase of a primary residence. c. It applies to the deduction of medical expenses purchased in a pharmacy. d. It applies to the deduction of state and local (SALT) taxes. 3. Which of the following statements about education expenses is (are) correct? I. II. They are deductible if they are paid to meet the minimal education requirements of the job. They are deductible if they are paid to qualify the client for a new trade or business a. I only b. II only c. Both I and II d. Neither I nor II 4. Your client Barbara has the following medical expenses. She pays $2,000 in medical premiums for insurance. She pays $1,000 in deductibles for her medicines. She pays $2,000 for dental work. How much of her medical expenses are deductible on Schedule A if she has an adjusted gross income of $100,000? a. $5,000 b. $4,500 c. SO d. None of the above.