California Bar Journal
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California Bar Journal

The State Bar of California


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Front Page - April 1999
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Legal specialist exam set Aug. 19
Sullivan to take reins at Stanford Law School
Only two appointed members remaining on State Bar board
Legal services board has five vacancies
Davis taps Michael Kahn
State Bar honors Justice Mosk with Witkin Medal
Board tentatively approves budget based on dues of $384
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If it distracts, so be it
Let's cut back on jury service
Limit bar to admissions and discipline
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From the President - Door to justice must be open
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Letters to the Editor
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Law Practice - Preparing for a successful mediation
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Appointments - Apply to serve on a bar committee
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Legal Tech - DSL speeds up Internet - at a reasonable price
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New Products & Services
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MCLE Self-Study
Taxes and long-term care
Self-Assessment Test
MCLE Calendar of Events
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Trials Digest
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Ethics Byte - Fiduciary duties basis for all rules
Attorney nabbed at State Bar offices for soliciting murders
Attorney Discipline
Ethics for the 21st Century - A canon for the future
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Public Comment


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Self-Assessment Test
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Answer the following questions after reading the MCLE article on long-term care. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. To sign an income tax return for an incapacitated person as an agent holding a durable power of attorney, the power must grant the agent authority to handle tax matters.

2. A spouse signing an incapacitated person's name to an income tax return must have been appointed as the incapacitated person's conservator.

3. An income tax refund may never be claimed later than three years after filing the return or two years after paying the tax.

4. A child can claim a personal exemption for his or her parent if the parent:

A. Has gross income of less than the amount of the personal exemption.

B. Did not file a joint return for the year.

C. Is not the child's dependent.

5. In determining whether a parent is his or her child's dependent, which of the following can not be considered support of the parent?

A. Food.

B. A free room.

C. Clothing.

D. All of the above are considered support.

E. None of the above is considered support.

6. Jo Jones has five children. Jo needs $1,000 per month for living expenses. Jo receives $400 per month in Social Security. Children A, B, C and D each contribute $100 per month for Jo's support. Child E contributes $200. Assuming proper procedures are followed and requirements other than support are met, can Child A claim a personal exemption for Jo?

7. See hypothetical above in Question 6. Can Child E claim a personal exemption for Jo assuming the procedures and conditions other than support are met?

8. An employer must pay FICA (Social Security and Medicare tax) for domestic help if the employer is required to pay FUTA (unemployment tax).

9. Leslie Smith's licensed social worker has prescribed a plan of care which includes personal care services because Leslie is chronically ill. Leslie's kindly neighbor will come into Leslie's house daily and provide these services. Which of the following can be used by the IRS to deny a medical expense deduction for the neighbor's wage?

A. The care plan was prescribed by a social worker, not by a physician.

B. The services are provided in Leslie's home, not a facility.

C. The services are only for personal care, not therapeutic treatment.

D. The neighbor is not a licensed health professional.

E. None of the above.

10. Long-term care insurance can be expensive for an older person. If the premium in 1999 for your 71-year-old client is $2,700, would it be fully deductible as a medical expense?

11. What is a "viatical settlement?"

A. A sediment of cholesterol in the veins.

B. A pledge of a life insurance policy as collateral for a loan.

C. A financial arrangement available only to persons suffering from AIDS.

D. A sale of a life insurance policy prior to death by a terminally ill or chronically ill insured.

12. A child may deduct a dependent parent's unreimbursed medical expenses if they exceed 7.5 percent of the parent's adjusted gross income.

13. Ben pays his mother's medical expenses and furnishes more than half of his mother's support, providing a nice supplement to her gross income of $5,000. Assuming other requirements are met, may Ben claim his mother as a personal exemption and deduct his mother's medical expenses?

A. Ben may claim a personal exemption but not deduct the medical expenses.

B. Ben may deduct the medical expenses but not claim a personal exemption.

C. Ben may deduct the medical expenses and claim a personal exemption.

D. Ben may claim neither a personal exemption nor deduct the medical expenses.

14. Domestic workers who meet the definition of "employees" must be given a W-2 form even if the employer does not withhold income tax.

15. To fully exclude the proceeds of a life insurance policy (accelerated death benefit) from a terminally ill person's gross income, the person must die within six months.

16. A child who contributes less than half of a parent's support can never claim the parent as a personal exemption on the child's income tax.

17. Leslie, whose doctor has certified her to be a chronically ill individual, lives alone and needs assistance, but with bathing and dressing only. An aide, arranged by the doctor's registered nurse, has come into Leslie's home daily for the last nine months to help Leslie with those tasks. If all other requirements are met, can Leslie deduct the aide's salary as a medical expense?

18. Edgar is liable for both FICA and FUTA withholding for nursing aides hired to provide for his long-term care needs. Must Edgar pay this tax every quarter?

19. Karen's father is a citizen and permanent resident of Mexico. Assuming the other requirements for claiming a personal exemption are met, can Karen claim a personal exemption for her father?

20. ACME Widget owns a life insurance policy on the life of its president, Fred Camshaft, who is terminally ill. The policy contains an accelerated benefits rider. ACME, shortly before Fred's death, cashes in the policy utilizing this rider. Are the proceeds excludable from ACME's gross income?


This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.