accounting-Whether a worker is an employee versus an independent contractor

QUESTION

1. Whether a
worker is an employee versus an independent contractor is a very contentious
issue between the IRS and Businesses. There are 3 categories of facts that the
IRS evaluates that provide evidence of the degree of control and independence
of a worker. (hint: use irs.gov)
a. What are
the 3 categories of fact?
b. Name 3 factors within each category and Provide a
brief explanation of each of the factors.
2.
List 3 differencesbetween the tests to meet for a
Qualifying Child dependency test versus a Qualifying Relative dependency test.
3.
Lynette and Lee divorced last year. During the current
year, their son, Brandon lives with Lynette for the entire year , and Lynette
pays all the costs of maintaining the household for herself and Brandon.
Lynette released the dependency exemption to Lee under the divorce decree.
Under these circumstances, what is Lynette’s filing status for the year?
4.
Lynette is a 40% partner in BLT partnership. BLT reported
$20,000 of business income, capital losses of $10,000, lobbying expenses of
$5,000 and $3,000 of taxable interest income for the year. BLT also distributed
$2,000 of cash to Lynette.
.
(A) Assuming Lynette had no other capital gain or
loss activity this tax year, what amount of gross income from her ownership in
BLT partnership will Lynette report for the current year?
.
(B) What is the change in her basis in her
partnership interest for the above items this year?
5.
List 4 potential education tax benefits Congress created
to help make the costs of higher education more affordable and hence encourage
taxpayers (and their dependents) to get education beyond high school. 16 points

What is the Benefit and the amount? Where is it reported on the 1040? At what
AGI does the benefit BEGIN to phaseout for 2015 tax year assuming MFJ status?
What are requirements/restrictions?

ANSWER:

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