Exam 5: Itemized Deductions and Other Incentives

The expense of a review course for a state real estate agent's exam is deductible as a miscellaneous itemized deduction by a taxpayer attempting to become an agent.

If the taxpayer fails to locate a job, job hunting expenses are not deductible.

If a taxpayer installs special equipment in their home for medical reasons, some or all of the cost can be included as a deductible medical expense.​

​Which of the following types of interest are not likely to be deductible in 2015?

Which of the following charitable contributions is not tax deductible?

Which of the following types of interest is not deductible?

Jennie receives $12,000 (of which $2,000 is earnings) from a Qualified Tuition Program. She uses the funds to pay for new furniture for her apartment. What amount is taxable to Jennie?

Ronald donates publicly traded Microsystems stock with a basis of $2,000 and a fair market value of $20,000 to the local library, which is considered a public charity. Ronald has $30,000 of adjusted gross income, and he purchased the stock 15 years ago. How is this contribution treated on Ronald's tax return?

Jake developed serious health problems and had his bathroom remodeled so it is wheelchair-accessible and had a handicapped shower installed, based on a written prescription by his doctor. The cost of the remodel is $15,000 and is deemed to add no value to his house by a real estate appraiser. How is the cost of the remodel treated on Jake's tax return?

Educational expenses are deductible as a miscellaneous itemized deduction even if the education is required to meet the minimum requirements for the taxpayer's current job.

For the current tax year, David, a married taxpayer filing a joint return, reported the following: What is the maximum amount that David can deduct in the current year as investment interest expense?

Premiums paid for life insurance policies are deductible as medical expenses.

Itemized deductions are subject to a phase-out based on AGI for certain high-income taxpayers.

​All taxpayers may deduct up to $4,000 of higher education tuition expenses.

Taxpayers are permitted to take an itemized deduction for the lesser of state income taxes paid or state sales taxes paid.​

In 2015, David, age 65, had adjusted gross income of $32,000. During the year he paid the following medical expenses: What amount can David deduct as medical expenses (after the adjusted gross income limitation) in calculating his itemized deductions for 2015?

Diane's engagement ring is stolen in the current year. It cost $1,500 and was worth $1,500. Diane makes $30,000 as an office manager and has no other income. What is her casualty loss deduction?

If a taxpayer contributes a painting to a museum but reserves the right to use the painting for parties, he may not be allowed a deduction for the charitable contribution.

Geoffrey receives $20,000 from a qualified tuition program created by his grandmother. The program had accumulated $6,000 in earnings. He used the full $20,000 to pay for qualified higher education expenses. Calculate the amount of earnings subject to taxation.

For married taxpayers filing a joint return in 2015, at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs (Section 529 plans) start?