Question Number One

Twelver true$-$false statements appear below. You must answer all of them. For each statement, insert $"$T$"$ or $"$F$"$ in the appropriate space provided on the separate answer sheet.

A nonbusiness bad debt is always treated as a long$-$term capital loss for tax purposes.

Under IRC $162,$ the "all events test" is satisfied as soon as all events establishing the existence of a liability have occurred.

Current income tax law allows deduction for IRC $212$ expenditures associated with rent or royalty income, but only as itemized deductions.

To be "ordinary" under IRC $162,$ an expense must be habitual or recurring.

Trade or business interest expense is allowable as an itemized deduction.

An individual may not elect to substitute ACRS depreciation in lieu of the applicable MACRS rules.

An expense is "necessary" if it is appropriate, helpful, or capable of making a contribution to the taxpayer's profit seeking activity.

A self$-$employed individual may deduct qualifying travel expenses incurred in his$/$her trade or business activity as a deduction "from adjusted gross income."

Student loan interest expense is properly claimed as a deduction for AGI.

Employee business expenses are no longer deductible by the employee on Form $1040.$

IRC $162$ requires an expenditure to be both ordinary and necessary in order to be deductible.

Under MACRS, the default convention for tangible personal property is the midmonth convention.