24. Sally purchased a tax software package from Taxing Software. She paid $1,892 for one license. Sally downloaded the software package and all pertinent data associated with the tax software. She liked the fact that there were no physical pieces mailed to her with the order and that everything was downloaded from the internet. Which of the following statements is most accurate?

    1. a) Sally will owe use tax on the purchase of the software.

    2. b) Sally is required to register with the BOE to pay her use tax on the software.

    3. c) Sally is not required to pay use tax on this transaction.

    4. d) Sally must pay use tax on this transaction because the software will be used in a

       business.

25. Samuel operates a business in California and sells his products through the internet. Samuel has the following sales:

California sales delivered Out-of-state sales delivered Sales out of the country delivered Download only sales nothing delivered

On what amount will Samuel pay use tax?

1. a) $ 36,400

2. b) $ 66,250

3. c) $125,210

d) $170,320

$36,400 $29,850 $58,960 $45,110

29. Lee owns a photography business. He purchased several items during the year and wants to know if can expense them using the De Minimis Safe Harbor Election. Which of the following items can Lee expense?

Camera/Tripod combination High-speed handheld camera Photo software (downloadable only) Bundled backdrops for inside photos Photo props License to use an online software

$2,845 $2,387 $1,963 $2,100 $ 615 $2,499

1. a) Lee can expense all items listed.

2. b) Lee can expense the high-speed handheld camera, bundled backdrops, and the photo

   props.

3. c) Lee can expense everything except the camera/tripod combination and the license to use

   an online software.

4. d) Lee cant expense any items listed.

30. Frans AGI is $110,000, which includes $500 in investment income. What amount of the following expenses are deductible on her California return?

Employee business expenses Legal fees (to get back money owed) Investment expenses Prior year state taxes paid $1,800

a) $3,550 b) $1,750 c) $1,800 d)$ 0

31. Justin itemized his deductions on his federal tax return for tax years 2014-2017. Justin received a bill indicating that he was overpaid $2,000 by the military in 2015 and needed to pay it back immediately. The income was taxable to the IRS and California. He paid it back in 2017. How should this be handled on his 2017 federal and California tax returns?

1. a) Justin doesnt need to do anything; his 2015 return has already been filed.

2. b) Justin can deduct the amount of the repayment as an itemized deduction subject to the

   2% limit on his federal return and as an adjustment on his California return.

3. c) Justin can deduct the amount on his federal return but not on his California return.

4. d) Justin must deduct it on his Califonia return but not on his federal return.

32. California tax laws do not conform to all federal tax laws. Therefore, adjustments must be made on Schedule CA (540). What statement is most accurate regarding the claim of right principle for California?

1. a) Claim of Right is not an adjustment on the California return unless it's been taxed by California.

2. b) California does not allow the claim of right adjustment if it was not taken on the federal return.

3. c) The federal return allows either a deduction or a credit for claim of right. California only allows a deduction.

4. d) California only allows a credit for claim of right, regardless of the tax due.