Question 1

The cost of uniforms is deductible only by self-employed taxpayers.

Accepted Answer

A) True 
 B)False

Question 2

Melissa took a $1,500 distribution from her educational savings account and used $1,200 to pay for qualified education expenses. Before the distribution, Melissa's account balance was $4,000, of which $1,000 was earnings. Calculate the following:

Accepted Answer

a. $1,125. 75 percent of the account bal

Question 3

​Dr. Wheeler donates her time and services to Doctors with No Limits, a qualified charity. Dr. Wheeler can take a tax deduction for the $3,400 market value of her time donated.

Accepted Answer

A) True 
 B)False

Question 4

Sherry had $5,600 withheld from her wages for state income taxes during 2015. In May of 2015, she received a $450 refund for her prior year state tax return. The amount of Sherry's tax on her 2015 tax return is $6,100 and she pays the additional tax of $500 ($6,100 - $5,600) when she files her state income tax return in April of 2016.
a.​
Assuming she elects to deduct the state income tax, how much state income taxes should Sherry deduct on Schedule A of Form 1040 of her 2015 federal income tax return?
b.How should Sherry report the $450 refund?

Accepted Answer

The answer of Sherry had $5,600 withheld from her wages...

Question 5

Daniel lives in a state that charges a vehicle registration fee of $50 plus $20 for every $1,000 of value. During the current year, Daniel paid $170 for registration of his automobile.
a.​
How much of the vehicle registration fee is deductible as a personal property tax on Schedule A of Daniel's Form 1040?
b.Explain your answer.

Accepted Answer

The answer of Daniel lives in a state that charges...

Question 6

Which of the following is not an itemized deduction?

Accepted Answer

A) Medical expenses 
B) IRA contribution deduction 
C) Personal property taxes 
D) Union dues 
E) All of the above are itemized deductions 
A) Medical expenses 
B) IRA contribution deduction 
C) Personal property taxes 
D) Union dues 
E) All of the above are itemized deductions

Question 7

What is the maximum amount of home equity debt (not acquisition debt) on which interest is fully deductible?

Accepted Answer

A) $0 
B) $50,000 
C) $100,000 
D) $200,000 
E) None of the above 
A) $0 
B) $50,000 
C) $100,000 
D) $200,000 
E) None of the above

Question 8

Lourdes is a paralegal. Since she often deals with legal matters, she feels a law degree would be beneficial to her. May Lourdes deduct her educational expenses for law school as a miscellaneous itemized deduction? Explain.

Accepted Answer

No. The cost of educational expenses for

Question 9

The cost of over-the-counter aspirin and decongestants is a deductible medical expense even though they are non-prescription drugs.

Accepted Answer

A) True 
 B)False

Question 10

Steve keeps a valuable bonsai collection in his back yard. In the current year, thieves disarmed his security system and stole several of the bonsai. The stolen bonsai had a fair market value and adjusted basis of $4,500. Assuming that Steve had no insurance coverage on the bonsai and his adjusted gross income for the current year is $28,000, calculate the amount of his theft loss deduction.

Accepted Answer

The answer of Steve keeps a valuable bonsai collection in...

Question 11

If personal property is completely destroyed, the casualty loss deduction is still reduced by a floor amount.

Accepted Answer

A) True 
 B)False

Question 12

Carla is a high school teacher who is required by her school district to take continuing education courses which are offered at the local college. She is also in the process of taking classes at a different university where she is pursuing her Ph.D. to become a research specialist. She pays the tuition for both schools. Which of the following is true?

Accepted Answer

A) She may deduct all of the tuition from each school because they are education expenses related to job skill improvement. 
B) She may not deduct tuition from either school. 
C) She may not deduct the continuing education tuition because it is required by her job. 
D) She may deduct the continuing education tuition from the local college because it meets her employer's requirement to maintain her current job skills. 
E) None of the above is correct. 
A) She may deduct all of the tuition from each school because they are education expenses related to job skill improvement. 
B) She may not deduct tuition from either school. 
C) She may not deduct the continuing education tuition because it is required by her job. 
D) She may deduct the continuing education tuition from the local college because it meets her employer's requirement to maintain her current job skills. 
E) None of the above is correct.

Question 13

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Accepted Answer

A) True 
 B)False

Question 14

Randy is advised by his physician to install an elevator in his residence, since he is afflicted with heart disease. The cost of installing the elevator is $10,000 and it has an estimated useful life of 10 years. He installs the elevator in January of the current year, and it increases the value of his residence by $8,000. Disregarding the limitation based on adjusted gross income, how much of the cost of the elevator may Randy take into account in determining his medical expense deduction for the current year?

Accepted Answer

A) $0 
B) $750 
C) $2,000 
D) $10,000 
E) None of the above 
A) $0 
B) $750 
C) $2,000 
D) $10,000 
E) None of the above

Question 15

​Stan, a single taxpayer, has $1,700 of state income taxes withheld from his wages in the current year. In the current year, he also received a $320 refund on his prior year state income tax. Stan did not itemize last year but he intends to do so this year. Stan used the sales tax estimate tables and determined his sales tax deduction amount is $1,600. What amount should Stan deduct for state taxes?

Accepted Answer

A) ​$0 
B) ​$1,380 
C) ​$1,600 
D) ​$1,700 
E) ​None of the above 
A) ​$0 
B) ​$1,380 
C) ​$1,600 
D) ​$1,700 
E) ​None of the above

Question 16

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

Accepted Answer

A) $1,000 
B) $3,000 
C) $4,000 
D) $5,000 
E) $6,000 
A) $1,000 
B) $3,000 
C) $4,000 
D) $5,000 
E) $6,000

Question 17

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Accepted Answer

A) True 
 B)False

Question 18

Sally and Jim purchased their personal residence in Santa Barbara 20 years ago for $150,000. The home has a fair market value today of $1,000,000. For the current year, they have a $10,000 first mortgage on their home, on which they paid $1,000 in interest. They also have a home equity loan secured by their home with a balance throughout the year of $110,000. The proceeds of the home equity loan were used to send their two children to college. They paid interest on the home equity loan of $5,500 for the year.
​
Calculate the amount of their deduction for interest paid on qualified residence acquisition debt and qualified home equity debt for the current year.
​
Qualified residence acquisition debt interest:
​
Qualified home equity debt interest:

Accepted Answer

The answer of Sally and Jim purchased their personal residence...

Question 19

Fran paid the following amounts of interest during 2015:
Calculate the amount of Fran's interest deduction for 2015.

Accepted Answer

$12,000 =

Question 20

Which of the following interest expense amounts is not deductible 2015?

Accepted Answer

A) Education loan interest of $2,000, assuming the taxpayer is single and has income of $150,000. 
B) Home equity loan interest of $9,000 on a loan of $100,000, the proceeds of which were used to purchase a vacation home. 
C) Investment interest expense of $10,000, assuming the taxpayer has $15,000 of investment income. 
D) Points of $2,000 paid on a mortgage loan for the purchase of a new principal residence. 
A) Education loan interest of $2,000, assuming the taxpayer is single and has income of $150,000. 
B) Home equity loan interest of $9,000 on a loan of $100,000, the proceeds of which were used to purchase a vacation home. 
C) Investment interest expense of $10,000, assuming the taxpayer has $15,000 of investment income. 
D) Points of $2,000 paid on a mortgage loan for the purchase of a new principal residence.

The cost of uniforms is deductible only by self-employed taxpayers.

Melissa took a $1,500 distribution from her educational savings account and used $1,200 to pay for qualified education expenses. Before the distribution, Melissa's account balance was $4,000, of which $1,000 was earnings. Calculate the following:

Dr. Wheeler donates her time and services to Doctors with No Limits, a qualified charity. Dr. Wheeler can take a tax deduction for the $3,400 market value of her time donated.

Which of the following is not an itemized deduction?

What is the maximum amount of home equity debt (not acquisition debt) on which interest is fully deductible?

Lourdes is a paralegal. Since she often deals with legal matters, she feels a law degree would be beneficial to her. May Lourdes deduct her educational expenses for law school as a miscellaneous itemized deduction? Explain.

The cost of over-the-counter aspirin and decongestants is a deductible medical expense even though they are non-prescription drugs.

If personal property is completely destroyed, the casualty loss deduction is still reduced by a floor amount.

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Fran paid the following amounts of interest during 2015: Calculate the amount of Fran's interest deduction for 2015.

Which of the following interest expense amounts is not deductible 2015?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 5: Itemized Deductions and Other Incentives

The cost of uniforms is deductible only by self-employed taxpayers.

Melissa took a $1,500 distribution from her educational savings account and used $1,200 to pay for qualified education expenses. Before the distribution, Melissa's account balance was $4,000, of which $1,000 was earnings. Calculate the following:

​Dr. Wheeler donates her time and services to Doctors with No Limits, a qualified charity. Dr. Wheeler can take a tax deduction for the $3,400 market value of her time donated.

Which of the following is not an itemized deduction?

What is the maximum amount of home equity debt (not acquisition debt) on which interest is fully deductible?

Lourdes is a paralegal. Since she often deals with legal matters, she feels a law degree would be beneficial to her. May Lourdes deduct her educational expenses for law school as a miscellaneous itemized deduction? Explain.

The cost of over-the-counter aspirin and decongestants is a deductible medical expense even though they are non-prescription drugs.

If personal property is completely destroyed, the casualty loss deduction is still reduced by a floor amount.

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Fran paid the following amounts of interest during 2015: Calculate the amount of Fran's interest deduction for 2015.

Which of the following interest expense amounts is not deductible 2015?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Dr. Wheeler donates her time and services to Doctors with No Limits, a qualified charity. Dr. Wheeler can take a tax deduction for the $3,400 market value of her time donated.