Ch09 DISCUSSION QUESTIONS

1. LO.1, 9 Sophia and Jacob are married and file a joint return. The return for 2012 included a Form 2106 for each of them. The return for 2013, however, included a Form 2106 and a Schedule C. In terms of employment status, what could have changed?

2. LO.1, 9 Yolanda is employed but is not reimbursed by her employer for her job-related expenses. If Yolanda always claims the standard deduction, she can never deduct any of these expenses. Do you agree with this conclusion? Explain.

3. LO.1 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.

4. LO.1 Bernard operates a hair styling salon as a sole proprietor. Because his shop has several extra workstations that are not being used, he is considering renting these to other stylists, but he wants to avoid any employer-employee relationship with them.
Advise Bernard on the type of working arrangement he should set up to ensure that any new stylists will be classified as independent contractors and not as employees.

5. LO.1, 11 In mid-2013, Madison goes to work for Knot Corporation. In January 2014, she receives a Form 1099 from Knot reflecting her classification as an independent contractor.
Madison disagrees with this classification.
a. Why does she disagree?
b. Does Madison have any recourse on the issue of her employment status? Explain.

6. LO.1 In terms of characteristics, how are statutory employees similar to common law employees? To independent contractors?

7. LO.1 The IRS presumes that two types of workers should be classified as independent contractors. Who are these workers, and why is the automatic classification justified?

8. LO.2 Milton is a resident of Mobile (AL) and is employed by Scaup Corporation.
Because Scaup closed its Mobile office, Milton no longer has any nondeductible commuting expenses although he continues to work for Scaup. Explain why.

9. LO.2 In 2011, Emma purchased an automobile, which she uses for both business and personal purposes. Although Emma does not keep records as to operating expenses (e.g., gas, oil, and repairs), she can prove the percentage of business use and the miles driven each year. In March 2013, Emma seeks your advice as to what income tax benefit, if any, she can derive from the use of her automobile. What would you suggest?

10. LO.2, 3 Explain the difference between travel expenses and transportation expenses.

11. LO.3 Lance, who practices law in New York City, leaves his office on Tuesday at 4:00 A.M., flies to Los Angeles, makes a court appearance at 1:00 P.M., and flies back to
New York that same day.
a. Was Lance away from home for income tax purposes? Why or why not?
b. What difference does it make?

12. LO.3 The lodging expense of an employee who is not away from home overnight can never be deductible. Do you agree with this statement? Explain.

13. LO.3 Dr. Werner is a full-time professor of accounting at Pelican University. During the year, he teaches continuing education programs for CPA groups in several cities. He also serves as an expert witness in numerous lawsuits involving accounting fraud. Comment on the possible tax treatment of Dr. Werner’s job-related expenses.

14. LO.3 Bill and Jean Wilder attend a three-day seminar in Chicago on current developments in taxation. Bill is a partner in a law firm in Memphis specializing in tax practice, while his wife, Jean, is a paralegal with the same firm. Comment on the deductibility of the Wilders’ expenses in attending the seminar.

15. LO.3 Rick is scheduled to go to London on business and would like to do some sightseeing while there. A colleague advises him that to maximize his deductible expenses, he should plan the business and personal portions of the trip carefully to make effective use of weekends and holidays. What is meant by this advice?

16. LO.4 To qualify for the moving expense deduction, a taxpayer must satisfy a time test.
a. What is the time test?
b. When might the taxpayer be excused from satisfying the time test?
c. What reporting procedure should be followed when the taxpayer has to file a return after the moving expenses have been incurred but before the time test requirement ismet?

17. LO.4 Emma, who lives and works in Wisconsin, is planning to retire and move to Costa
Rica. She has heard that when you retire and move to a foreign country, all moving expenses are deductible. Does Emma have a correct grasp of the rules involved? Explain.

18. LO.5, 10 Jamie has an undergraduate degree in finance and is employed full-time by a bank. She is taking courses at a local university leading to an MBA degree.
a. Is the cost of this education deductible to her?
b. If so, what limitations are imposed on the deduction?

19. LO.5, 10 In connection with § 222 (deduction for qualified tuition and related expenses), comment on the relevance of the following:
a. The standard deduction is claimed.
b. Enrollment at a college does not require the payment of a student activity fee.
c. Miscellaneous itemized deductions are less than 2% of AGI.
d. The taxpayer is married and files a separate return.
e. A father pays the tuition on behalf of a daughter who does not qualify as his dependent.
f. The taxpayer is single and has MAGI of $80,001.
g. The lifetime learning credit is claimed.
h. The taxpayer, a CPA, pays for tuition and course materials to attend law school.

20. LO.6 In each of the following situations, indicate whether there is a cutback adjustment.
a. Each year, the employer awards its top salesperson an all-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.

21. LO.6 At the last minute, a law firm purchases 10 tickets to the Super Bowl to entertain certain key clients. Comment on some possible tax ramifications of this situation.

22. LO.7 In connection with the office in the home deduction, comment on the following:
a. The exclusive use requirement.
b. The distinction between direct and indirect expenses.
c. The effect on deduction of taxpayer’s work status (i.e., employed or self-employed).
d. The ownership status of residence (i.e., owned or rented).
e. The tax treatment of office furnishings (e.g., desk, chairs, and file cabinets).
f. The treatment of expenses that exceed the gross income from the business.

23. LO.4, 7 Trent, a resident of Florida, attends Rice University. After graduation, he moves to Dallas, where he begins a job search. Shortly thereafter, he accepts a position with a local TV station as a reporter. Trent’s college degree is in accounting. Presuming no reimbursement, what employment-related expenses might Trent be eligible to deduct?

24. LO.8 Regarding the tax implications of various retirement plans, comment on the following:
a. The difference between Keogh (H.R. 10) and traditional deductible IRA plans.
b. The difference between traditional IRA and Roth IRA plans.

25. LO.8 Joey, who is single, is not covered by another qualified plan and earns $114,000 at his job in 2013. How much can he contribute to a traditional IRA or to a Roth IRA in 2013?

26. LO.9 What tax return reporting procedures must be followed by an employee under the following circumstances?
a. Expenses and reimbursements are equal under an accountable plan.
b. Reimbursements at the appropriate Federal per diem rate exceed expenses, and an adequate accounting is made to the employer.
c. Expenses exceed reimbursements under a nonaccountable plan.

27. LO.3, 6, 9, 10, 11 Ava recently graduated from college and is interviewing for a position in marketing. Gull Corporation has offered her a job as a sales representative that will require extensive travel and entertainment but provide valuable experience. Under the offer, she has two options: a salary of $53,000 and she absorbs all expenses; a salary of $39,000 and Gull reimburses for all expenses. Gull assures Ava that the $14,000 difference in the two options will be adequate to cover the expenses incurred. What issues should have an impact on Ava’s choice?

28. LO.10 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.
P R O B L E M S

29. LO.2, 3 During the year, Olivia holds two jobs. After an eight-hour day at the first job, she works three hours at the second job. On Fridays of each week, she returns home for dinner before going to the second job. On the other days (Monday through Thursday), she goes directly from the first job to the second job, stopping along the way for a meal.
The mileage involved is as follows:
Home to first job 15
First job to second job 18
Home to second job 20
a. Assuming that Olivia works 48 weeks during the year, how much of her mileage is deductible?
b. Can Olivia deduct the dinners she purchased? Why or why not?

30. LO.2, 5 William is employed by an accounting firm and uses his automobile in connection with his work. During the month of October 2013, he works at the office for 4 days and participates in the audit of a key client for 19 days. In the audit situation, William goes directly from his home to the client’s office. On all other days, he drives to his employer’s office. On four Saturdays in October, he drives from his home to a local university where he attends classes in a part-time MBA program. Relevant mileage is as follows:
Home to office 12
Office to audit client 13
Home to audit client 14
Home to university 10
Using the automatic mileage method, what is William’s deduction for the month?

31. LO.2 Ella is the regional sales manager for a fast-food chain. She starts her work day by driving from home to the regional office, works there for several hours, and then visits the three sales outlets in her region. Relevant mileage is as follows:
Home to regional office 10
Regional office to sales outlet 1 13
Sales outlet 1 to sales outlet 2 11
Sales outlet 2 to sales outlet 3 9
Sales outlet 3 to home 15
If Ella uses the automatic mileage method and works 240 days in 2013, what is her deduction for the year?

32. LO.2 Jackson uses his automobile 90% for business and during 2013 drove a total of

14,000 miles. Information regarding his car expenses is listed below.
Business parking $ 140
Auto insurance 1,300
Auto club dues (includes towing service) 180
Toll road charges (business-related) 200
Oil changes and engine tune-ups 210
Repairs 160
Depreciation allowable 2,850
Fines for traffic violations (incurred during business use) 320
Gasoline purchases 2,800
What is Jackson’s deduction in 2013 for the use of his car if he uses:
a. The actual cost method?
b. The automatic mileage method?

33. LO.2 On July 1, 2009, Rex purchases a new automobile for $40,000. He uses the car

80% for business and drives the car as follows: 8,000 miles in 2009, 19,000 miles in 2010,

20,000 miles in 2011, and 15,000 miles in 2012. Determine Rex’s basis in the auto as of
January 1, 2013, under the following assumptions.
a. Rex uses the automatic mileage method.
b. Rex uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used—see Chapter 8. The recovery limitation for an auto placed in service in 2009 is as follows: $2,960 (first year), $4,800 (second year), $2,850 (third year), and $1,775 (fourth year).]

34. LO.3 Kristen, the regional manager for a national hardware chain, is based in Atlanta.
During March and April of this year, she has to replace temporarily the district manager in Jackson, Mississippi. During this period, Kristen flies to Jackson on Sunday night, spends the week at the district office, and returns home to Atlanta on Friday afternoon.
The cost of returning home is $550, while the cost of spending the weekend in Jackson would have been $490.
a. Presuming no reimbursement by her employer, how much, if any, of these weekend expenses may Kristen deduct?
b. Would your answer in (a) change if the amounts involved are reversed (i.e., the trip home cost $490; staying in Jackson would have been $550)? Explain.

35. LO.3, 6 In June of this year, Dr. and Mrs. Bret Spencer traveled to Denver to attend a three-day conference sponsored by the American Society of Implant Dentistry. Bret, a practicing oral surgeon, participated in scheduled technical sessions dealing with the latest developments in surgical procedures. On two days, Mrs. Spencer attended group meetings where various aspects of family tax planning were discussed. On the other day, she went sightseeing. Mrs. Spencer does not work for her husband, but she does their tax returns and handles the family investments. Expenses incurred in connection with the conference are summarized below.
Airfare (two tickets) $2,000
Lodging (single and double occupancy are the same rate—$250 each day) 750
Meals ($200 × 3 days)* 600
Conference registration fee (includes $120 for
Family Tax Planning sessions) 620
Car rental 300 * Split equally between Dr. and Mrs. Spencer.
How much, if any, of these expenses can the Spencers deduct?

36. LO.1, 3, 6 Kim works for a clothing manufacturer as a dress designer. She travels to
New York City to attend five days of fashion shows and then spends three days sightseeing.
Her expenses are as follows:
Airfare $1,500
Lodging (8 nights) 1,920
Meals (8 days) 1,440
Airport transportation 120 [Assume that lodging/meals are the same amount for the business and personal portion of the trip (e.g., $180 per day for meals).]
a. Presuming no reimbursement, how much can Kim deduct as to the trip?
b. Would the tax treatment of Kim’s deduction differ if she was an independent contractor (rather than an employee)? Explain.

37. LO.3 On Thursday, Justin flies from Baltimore (his home office) to Cadiz (Spain). He conducts business on Friday and Tuesday; vacations on Saturday, Sunday, and Monday (a legal holiday in Spain); and returns to Baltimore on Thursday. Justin was scheduled to return home on Wednesday, but all flights were canceled due to bad weather. Therefore, he spent Wednesday watching floor shows at a local casino.
a. For tax purposes, what portion of Justin’s trip is regarded as being for business?
b. Suppose Monday was not a legal holiday. Would this change your answer in (a)?
Explain.
c. Under either (a) or (b), how much of Justin’s airfare qualifies as a deductible business expense?

38. LO.3 Monica travels from her office in Boston to Lisbon, Portugal, on business. Her absence of 13 days was spent as follows:
Thursday Depart for and arrive at Lisbon
Friday Business transacted
Saturday and Sunday Vacationing
Monday through Friday Business transacted
Saturday and Sunday Vacationing
Monday Business transacted
Tuesday Depart Lisbon and return to office in Boston
a. For tax purposes, how many days has Monica spent on business?
b. What difference does it make?
c. Could Monica have spent more time than she did vacationing on the trip without loss of existing tax benefits? Explain.

39. LO.4 Caden, a financial planner, decides to quit his job with an investment bank in
Charleston, South Carolina, and establish a private practice in Santa Fe, New Mexico. In connection with the move, he incurs the following expenses:
Moving van charge $4,500
Lodging during move 540
Meals during move 410
Loss on sale of residence in Charleston $9,000
Mileage for personal autos 3,500 miles
How much of these expenses, if any, can Caden deduct?

40. LO.4, 7 Upon losing his job as a plant manager in Quincy (Massachusetts), Anthony incurs $6,200 in job search expenses. Having no success in finding new employment in the same type of work, Anthony moves to Clearwater (Florida) in 2013 and begins a charter boat business. His expenses in connection with the move are summarized below.
Penalty for breaking lease on Quincy rented residence $2,800
Forfeiture of membership in Quincy Country Club 2,200
Packing and moving van charges 7,100
Lodging during move (3 nights) 380
Meals during move 360
Mileage (for two automobiles) 2,400 miles
How much of these expenses may Anthony deduct?

41. LO.4 After being downsized by his former employer, in November 2012, Wayne moves from Minnesota to Alabama to accept a new job. When filing his Federal income tax return for 2012, Wayne deducts the $14,000 in moving expenses he incurred (none of which were reimbursed by either his former or new employer). On June 6, 2013,
Wayne’s employment terminates. What are the tax consequences if the termination occurred because:
a. Wayne was killed by a drunk driver?
b. Wayne was downsized by the new employer?
c. Wayne was fired by the new employer because he assaulted a client?
d. Wayne quit because he inherited a large amount of money and decided he did not want to work anymore?

42. LO.5 Elijah is employed as a full-time high school teacher. The school district where he works recently instituted a policy requiring all of its teachers to start working on a master’s degree. Pursuant to this new rule, Elijah spent most of the summer of 2013 taking graduate courses at an out-of-town university. His expenses are as follows:
Tuition $6,600
Books and course materials 1,500
Lodging 1,700
Meals 2,200
Laundry and dry cleaning 200
Campus parking 300
In addition, Elijah drove his personal automobile 2,200 miles in connection with the education. He uses the automatic mileage method.
a. How much, if any, of these expenses might qualify as deductions for AGI?
b. How much, if any, of these expenses might qualify as deductions from AGI?

43. LO.5 In each of the following independent situations, determine how much, if any, qualifies as a deduction for AGI under § 222 (qualified tuition and related expenses):
a. Lily is single and is employed as an architect. During 2013, she spends $4,100 in tuition to attend law school at night. Her MAGI is $64,000.
b. Liam is single and is employed as a pharmacist. During 2013, he spends $2,400 ($2,100 for tuition and $300 for books) to take a course in herbal supplements at a local university. His MAGI is $81,000.
c. Hailey is married and is employed as a bookkeeper. She spends $5,200 for tuition and $900 for books and supplies pursuing a bachelor’s degree in accounting. Her
MAGI is $40,000 on the separate return she files.
d. John spends $6,500 of his savings on tuition to attend Carmine State College. John is claimed as a dependent by his parents.
e. How much, if any, of the above amounts not allowed under § 222 might otherwise qualify as a deduction from AGI?

44. LO.6, 9 Eric is a licensed commercial pilot who works for Snipe Charter Jet Service.
Typically, Eric, who lives near the airport, flies a charter out of Tupelo (MS), to either Las Vegas or Reno, spends several nights there, and then returns home with the same group. Snipe provides Eric with a travel allowance of $1,800 per month but requires no accountability. For the current calendar year, Eric had the following job-related expenses:
Meals $ 7,000
Lodging 10,000
Transportation (taxis, limos) 500
Uniforms 1,300
Dry cleaning of uniforms 400
Annual physical exam 1,500
The uniforms are required to be worn on the job. The Federal Aviation Administration requires the annual physical exam for the maintenance of a commercial pilot’s license. How may Eric treat these expenses for Federal income tax purposes?

45. LO.6 Stork Associates paid $60,000 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $80 to $250 each.
At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event at a cost of $1,300. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated.
a. How much may Stork deduct for this event?
b. What, if any, is the deduction if no representative from Stork attended the game?
c. What if there was no bona fide business discussion either before or after the event?

46. LO.6 During the current year, Paul, the vice president of a bank, made gifts in the following amounts:
To Sarah (Paul’s personal assistant) at Christmas $36
To Darryl (a key client)—$3 was for gift wrapping 53
To Darryl’s wife (a homemaker) on her birthday 20
To Veronica (Paul’s boss) at Christmas 30
In addition, on professional assistants’ day, Paul takes Sarah to lunch at a cost of $82.
Presuming that Paul has adequate substantiation and is not reimbursed, how much can he deduct?

47. LO.7 Melanie is employed full-time as an accountant for a national hardware chain.
She also has a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home.
Expenses relating to her home are as follows:
Real property taxes $3,600
Interest on home mortgage 3,800
Operating expenses of home 900
Depreciation allocated to 20% business use 1,500
Melanie’s income from consulting is $17,000, and the related expenses are $5,000.
a. What is Melanie’s office in the home deduction?
b. Suppose Melanie also spent $4,000 to repaint and replace the carpet in the office.
How do these additional costs change the answer to part (a)?
c. Suppose Melanie’s income from consulting is only $8,000 (not $17,000). How does this change the answer to part (a)?

48. LO.7 Christine is a full-time teacher of the fourth grade at Vireo Academy. During the current year, she spends $1,400 for classroom supplies. On the submission of adequate substantiation, Vireo reimburses her for $500 of these expenses—the maximum reimbursement allowed for supplies under school policy. [The reimbursement is not shown as income (Box 1) of Form W–2 given to Christine by Vireo.] What are the income tax consequences of the $1,400 if Christine:
a. Itemizes her deductions from AGI?
b. Chooses the standard deduction?

49. LO.8 Amber’s employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its employees. Amber’s salary is $99,000, and her marginal tax rate is 33%.
a. What is the maximum amount Amber can elect for salary deferral treatment for 2013?
b. If Amber elects salary deferral treatment for the amount in (a), how much can she save in taxes?
c. What amount would you recommend that Amber elect for salary deferral treatment for 2013?

50. LO.8 Shyam is a participant in a SIMPLE § 401(k) plan. He elects to contribute 4% of his $40,000 compensation to the account, while his employer contributes 3%. What amount will not vest immediately, if any?

51. LO.8 Harvey is a self-employed accountant with earned income from the business of $120,000 (after the deduction for one-half of his self-employment tax). He has a profit sharing plan (e.g., defined contribution Keogh plan). What is the maximum amount
Harvey can contribute to his retirement plan in 2013?

52. LO.8 Answer the following independent questions with respect to traditional IRA contributions for 2013:
a. Juan, age 41, earns a salary of $28,000 and is not an active participant in any other qualified plan. His wife, Agnes, has no earned income. What is the maximum total deductible contribution to their IRAs? Juan wants to contribute as much as possible to his own IRA.
b. Abby, age 29, has earned income of $25,000, and her husband, Sam, has earned income of $2,600. They are not active participants in any other qualified plan. What is the maximum contribution to their IRAs?
c. Leo’s employer makes a contribution of $3,500 to Leo’s simplified employee pension plan. If Leo is single, has earned income of $32,000, and has AGI of $29,000, what amount, if any, can he contribute to an IRA?

53. LO.8 Jimmy establishes a Roth IRA at age 47 and contributes a total of $89,600 over 18 years. The account is now worth $112,000. How much of these funds may Jimmy withdraw tax-free?

54. LO.8 Carri and Dane, ages 34 and 32, respectively, have been married for 11 years, and both are active participants in employer qualified retirement plans. Their total AGI in

2013 is $181,000, and they earn salaries of $87,000 and $95,000, respectively. What amount may Carri and Dane:
a. Contribute to regular IRAs?
b. Deduct for their contributions in (a)?
c. Contribute to Roth IRAs?
d. Deduct for their contributions in (c)?
e. Contribute to Coverdell Education Savings Accounts for their three children?

55. LO.3, 6, 9 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?

56. LO.3, 6, 9 During the year, Brenda has the following expenses related to her employment:
Airfare $8,500
Meals 4,000
Lodging 4,900
Transportation while in travel status (taxis and limos) 940
Entertainment of clients 8,000
Although Brenda renders an adequate accounting to her employer, she is reimbursed for only $12,000 of the above expenses. What are Brenda’s tax consequences based on the following assumptions?
a. The $12,000 reimbursement does not designate which expenses are covered.
b. The reimbursement specifically covers only the meals and entertainment expenses.
c. The reimbursement covers any of the expenses other than meals and entertainment.
d. If Brenda has a choice of reimbursement procedures [parts (a), (b), or (c) above], which should she select? Why?

57. LO.6, 9, 10 Audry, age 38 and single, earns a salary of $59,000. She has interest income of $1,600 and has a $2,000 long-term capital loss from the sale of a stock investment.
Audry incurs the following employment-related expenses during the year:
Transportation $5,500
Meals 2,800
Lodging 4,200
Entertainment of clients 2,200
Professional dues and subscriptions 300
Under an accountable plan, Audry receives reimbursements of $4,500 from her employer. Calculate her AGI and itemized employee business expenses.

58. LO.5, 7, 10 B. J. and Carolyn Grace are full-time employees. B. J. is an elementary school teacher, and Carolyn is a registered nurse at a hospital. During the year, they incur the following employment-related expenses:
School supplies for use in the classroom $1,400
Emergency room uniforms 800
Union dues (teachers association) 200
Job hunting expenses (Carolyn obtained another nursing position but decided not to change jobs) 1,300
Continuing education correspondence courses (required to maintain nursing license) 380
Professional dues and subscriptions 1,100
None of these expenses are reimbursed by the employers.
For the year, the Graces file a joint return reflecting salary income of $90,000. They also have gambling income of $6,000 and gambling losses of $7,000 (fully substantiated).
They pay $400 to have their tax return prepared. They have other itemized deductions (i.e., interest on home mortgage, property taxes on personal residence, state income taxes, and charitable contributions) of $14,500. Determine the total amount of itemized deductions allowed to the Graces.

59. LO.1, 2, 4, 5, 7, 10 Complete the following table by classifiying each of the independent expenditures (assume that no reimbursement takes place).
Expense Item
Deductible for AGI
Deductible from AGI
Not
Deductible
a. Moving expense of an employee ______ ______ ______
b. Tax return preparation fee incurred by an employed plumber ______ ______ ______
c. Safety glasses purchased by an employed pipefitter ______ ______ ______
d. Dues to auto club (e.g., AAA) for taxpayer who uses the automatic mileage method ______ ______ ______
e. Nursing refresher course for taxpayer who retired from nursing five years ago ______ ______ ______
f. Gambling loss not in excess of gambling gain by a self-employed architect ______ ______ ______
g. Contribution to Roth IRA by a selfemployed attorney ______ ______ ______
Expense Item
Deductible for AGI
Deductible from AGI
Not
Deductible
h. Business travel expenses by a statutory employee ______ ______ ______
i. Job hunting expense by an elementary school teacher seeking a position as an elementary school principal ______ ______ ______
j. Cost of bar exam review course taken by a recent law school graduate ______ ____