Chapter 9: Deductions and credits

3.Mason performs services for Isabella. In determining whether Mason is an employee or an independent contractor, comment on the relevance of each of the factors listed below.

a. Mason performs services only for Isabella and does not work for anyone else.
b. Mason sets his own work schedule.
c. Mason reports his job-related expenses on a Schedule C.
d. Mason obtained his job skills from Isabella’s training program.
e. Mason performs the services at Isabella’s business location.
f. Mason is paid based on time worked rather than on task performed.

20.In each of the following situations, indicate whether there is a cutback adjustment.

a. Each year, the employer awards its top salesperson an expense-paid trip to Jamaica.

b. The employer has a cafeteria for its employees where meals are furnished at cost.

c. The employer sponsors an annual Labor Day picnic for its employees.

d. Every Christmas, the employer gives each employee a fruitcake.

e. The taxpayer, an airline pilot, pays for meals and lodging during a layover between flights.

f. The taxpayer pays a cover charge to take key clients to a nightclub.

g. The taxpayer gives business gifts to her clients at Christmas.

h. The taxpayer purchases tickets to take clients to an athletic event.

28. Comment on the deductibility of each of the following items:

a. Club dues for the Coronado Club. Taxpayer, a lawyer, uses the luncheon club exclusively for business.
b. Cost of dry cleaning uniforms (including alterations by a tailor). Taxpayer is the doorman at a New York City hotel.
c. Expenses incurred by taxpayer, a member of the Maine National Guard, to participate in a two-day training session conducted in New Jersey.
d. Union dues paid by a self-employed carpenter.
e. Cost of CPA exam review course paid by a self-employed accountant
f. Fee paid to a real estate appraiser to determine the value of land a taxpayer is donating to charity.
g. Contribution to an IRA sponsored by taxpayer’s employer.
h. Cost of school supplies purchased by a high school teacher.

55. Charles has AGI of $94,000 during the year and the following expenses related to his employment: Lodging while in travel status $5,000 Meals during travel 4,000 Business transportation 6,000 Entertainment of clients 3,800 Professional dues and subscriptions 800 Charles is reimbursed $14,000 under his employer’s accountable plan. What are his deductions for and from AGI?