Which of the Following Situations Will Disqualify a Taxpayer from Taking

question 62

Multiple Choice

Which of the following situations will disqualify a taxpayer from taking a deduction for moving expenses?

• A)Pam moves from Phoenix to Los Angeles to take a new job.She works at the Los Angeles job for 45 weeks before starting a new job in Las Vegas.
• B)Paul moves from Boston to Miami to start a new business selling t-shirts.The business is not successful and Paul returns to Boston after 52 weeks.
• C)Phyllis moves from Seattle to San Francisco to open a coffee bar.She still owns the coffee bar and lives in San Francisco 90 weeks after her move.
• D)Marva moves from Dallas to Washington,DC,in her job as an IRS agent.She is still working at the IRS Washington office after one year.

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Definitions:

Unearned Fees

Income received by a company for services yet to be provided; recognized as a liability until the service is performed.

Fees Earned

Income generated from providing services or performing work for clients or customers.

Adjusting Entry

A journal entry made in accounting to record changes in revenue and expense accounts in order to match revenues and expenses to the period in which they occurred.

Cash Invested

Money that is put into a business or project with the expectation of generating income or profit.