Question

1. Julia had several types of business expenses, which she was able to deduct on her federal return. Does California law always follow the same rules as the federal law regarding employee business expenses?

   1. a) Yes, they are completely the same.

   2. b) Yes, except for non-employee spouses.

   3. c) No, there are a few differences.

   4. d) No, the rules are completely different.

1. Tyler works as a professional lobbyist on behalf of another person in California. He incurred $1,500 in out-of-pocket expenses that were ordinary and necessary to perform his job. He also contributed $500 to his favorite political candidate’s campaign. How much, if any, of the above expenses are deductible on Tyler’s California return?

   1. a) None are deductible.

   2. b) $1,500

   3. c) $2,000

   4. d) $ 500

2. California resident, Sam, has business expenses from entertaining clients at a club he is a member of. Which of the following would result in the denial of a deduction for business expenses incurred at the club on his California return?

   1. a) Alcohol not sold on the premises

   2. b) No adult entertainment permitted

   3. c) Smoking not allowed inside the club

   4. d) Entry restrictions based on race

1. David, a California resident, itemized his deductions on his federal return and on his California return. On his federal Schedule A, he claimed gambling losses of $4,560, of which $2,250 is from California lottery losses, and an investment interest expense deduction of $1,550; however, his California investment interest expense deduction is $1,880. Also, he paid $285 interest on a loan financed through a California public utility company for installing energy-efficient equipment in his main home. How would David report these differences on his California Schedule CA (540), line 41?

   1. a) + $2,865

   2. b) – $2,295

   3. c) – $1,635

   4. d) – $2,205

1. Geraldo took a business trip to Las Vegas for 3 days and his wife, Gina, accompanied him. Plane tickets cost $350 a piece. His meal cost was $150 and her meal cost was $130. The cost of the hotel stay was $400, which would have been the same had Geraldo traveled alone. According to California tax law, what amount of the business travel is deductible?

   a) $ 900 b) $1,380 c) $ 825 d) $ 890

Answer 1

Question No 1 Ans is : d) No the rules are completely different Question No 2 Ans is :a) None are deductible Question No 3 Ans is b) No adult entertainment is permitted Question No 4 Ans is c) -$1635 Question No 5 Ans is : $900