Answer the following statements true (T) or false (F)

Question

1. Educational expenses incurred by a self-employed CPA for courses necessary to meet continuing education requirements are fully deductible.
2. Educational expenses incurred by a self-employed bookkeeper for courses necessary to sit for the CPA exam are fully deductible.
3. In-home office expenses are deductible if the office is used exclusively on a regular basis as the principal place of business for any trade or business of the taxpayer.
4. In-home office expenses for an office used by the taxpayer for administrative or management activities of the taxpayer's trade or business are never deductible.
5. A sole proprietor will not be allowed to deduct current home office expenses to the extent that they create or increase a loss from her business.

Answer 1

1. TRUE
The CPA continuing education courses maintain and improve the skills in the taxpayer's current profession.
2. FALSE
Expenses are not deductible if the education is required to meet minimum educational requirements for a new trade or business.
3. TRUE
Two key tests for a home office deduction are the principal place of business test and the exclusive use test.
4. FALSE
Such expenses are deductible if there is no other fixed location of the trade or business where the taxpayer conducts substantial administrative or management activities of the trade or business.
5. TRUE
Home office expenses are limited if they will exceed the current year net income from the business.