Please answer the following as accurately as possible.
1. With regard to deductible travel expenses when attending a convention, all of the following statements are correct EXCEPT:
A. If you can show that your attendance benefits your trade or business,
you can deduct your travel expenses if the expenses are reasonable.
B. You
cannot deduct expenses for attending a convention, seminar or similar meeting
held outside of the North American area unless the meeting is directly related
to your trade or business.
C. If
you establish that a meeting held on a cruise ship is directly related to your
trade or business, you may be able to deduct expenses of up to $2,000 per trip.
D. You
must reduce otherwise deductible travel expenses that you pay by the
reimbursements not reported on your Form W-2 that you receive from others for
these expenses.
2. To meet the directly related test for entertainment expenses, you must show which of the following:
A. You did engage in business with the person during the entertainment period.
B. The main purpose of the combined business and entertainment was the active
conduct of business.
C. You had more than a general expectation of receiving income or some other
specific business benefit at some future time.
D. All of the above.
3. You are a self-employed caterer. To encourage the continuation of an existing business relationship, you took one of your clients to a Broadway show. The visit to the show occurred directly after a substantial business discussion with the client. You paid a ticket broker $300 for two tickets to that show. The face value of each ticket was $100 ($200 total). What is your total deductible expense for both tickets?
A. $100.
B.
$150.
C.
$200.
D.
$300.
4. A businessman can deduct up to $2,000 per year of expenses for attending conventions, seminars, or similar meetings held on cruise ships. All of the following requirements must be met, except:
A. The convention, seminar, or meeting is directly related to your trade or
business.
B. The
cruise ship company provides a statement that it has adequate facilities to
accommodate the needs of the convention, seminar, or meetings.
C.
You attach a statement signed by you that includes information about (1) the
total days of the trip; (2) the number of hours each day that you devoted to
scheduled business activities; (3) A program of the scheduled business
activities.
D. You
attach to your return a written statement signed by an officer of the sponsoring
organization or group that includes (1) A schedule of the business activities of
each day of the meetings and (2) The number of hours you attended the scheduled
business activities.
5. Horse and Carriage Partnership distributed the following gifts to their clients: 100 clipboards with their company logo on them, valued at $3 each ($300); 50 bottles of wine to clients who had orders over $50,000 in 2008 costing $35 each ($1,750) at Christmas. The amount that Horse and Carriage Partnership can deduct for business gifts in 2008 is:
A.
$300.
B. $1,550.
C. $1,750.
D.
$2,050.
6. Bart, a partner in the B&A Partnership attended the Comdex Computer Convention in Las Vegas. The partnership repairs and upgrades commercial computers for business use. At the convention, a new advanced computer hard drive was introduced that would make current machines run faster and more efficiently. Bart is responsible for purchasing hard drives for the computers used in the partnership. Bart's travel expenses excluding meals, were $950. Part of that amount includes a rental car of $100 incurred to visit his mother and $50 for flowers and candy he bought for her. How much is deductible as a business expense?
A. $950.
B.
$900.
C.
$800.
D.
$850.