Which of the Following Expenses, If Any, Qualify as Deductible

question 48

Multiple Choice

Which of the following expenses, if any, qualify as deductible?

• A)Contributions to a Coverdell Education Savings Account (CESA).
• B)Contributions to a qualified tuition program (§ 529 plan).
• C)Job-hunting expense of FBI agent who applies for the job of city manager of Beaumont, TX.
• D)Contribution to a traditional IRA.
• E)None of these.

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Definitions:

Variable Expenses

Expenses that vary directly with the amount of output or activity level.

Fixed Expenses

Costs that do not change in total with changes in the volume of activity, such as rent, salaries, and insurance premiums.

Variable Expenses

Costs that change in proportion to the level of business activity or production volume.

Fixed Expenses

Fixed expenses are costs that do not change in the short term regardless of the level of production or sales, such as rent, salaries, and insurance premiums.