Which of the Following Statements Regarding Limitations on the Deductibility

question 38

Multiple Choice

Which of the following statements regarding limitations on the deductibility of home office expenses of employees is correct?

• A) Deductible home office expenses of employees are miscellaneous itemized deductions subject to the 2 percent of AGI floor.
• B) Deductible home office expenses of employees are miscellaneous itemized deductions not subject to the 2 percent floor.
• C) Deductible home office expenses of employees are for AGI deductions limited to gross income from the business.
• D) Deductible home office expenses of employees are for AGI deductions not limited to gross income from the business.

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Definitions:

Repurchase

Another method used to pay out a firm’s earnings to its owners, which provides more preferable tax treatment than dividends.

Shares Outstanding

The total number of shares of a corporation that have been issued and are held by shareholders.

Normal Course of Business

The regular, day-to-day activities and operations conducted by a company to generate revenue.

Stock Dividend

A disbursement by a company to its stockholders, consisting of extra shares instead of monetary funds.