Question 1

Unreimbursed employee business expenses are miscellaneous itemized deductions, subject to the 2 percent of adjusted gross income limitation.

Accepted Answer

A) True 
 B)False

Question 2

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 3

Meade paid $5,000 of state income taxes in 2015. The total sales tax he paid during 2015 was $4,500, which included $3,000 for the cost of a new boat. How should Meade treat the taxes paid in his 2015 tax return?

Accepted Answer

Meade can deduct the greater of the sale

Question 4

Melvin owns his home and has a $200,000 mortgage related to his purchase of the residence. In the fall of the current year, he borrows $40,000 on credit cards for college costs for his two sons. The interest expense on the mortgage is $15,000 and the interest expense on the credit cards is $6,000. How much of the interest is deductible as an itemized deduction and why? If you were Melvin's accountant, what tax planning suggestion might you have made to him?

Accepted Answer

Melvin's total interest deduction on Sch

Question 5

During the current year, Cary and Bill incurred acquisition debt on their residence of $1,300,000 and a home equity loan of $200,000. On a joint tax return, what is the amount of their qualified acquisition debt and qualified home equity debt, respectively?

Accepted Answer

A) $900,000 and $100,000 
B) $1,000,000 and $0 
C) $1,000,000 and $100,000 
D) $1,300,000 and $200,000 
E) None of the above 
A) $900,000 and $100,000 
B) $1,000,000 and $0 
C) $1,000,000 and $100,000 
D) $1,300,000 and $200,000 
E) None of the above

Question 6

What income tax form does an employee use to report business expenses that are not reimbursed by an employer under an accountable plan?

Accepted Answer

A) Form 2106, Employee Business Expenses 
B) No form, the expenses are not deductible by the employee 
C) Schedule D 
D) Schedule R 
E) Schedule C 
A) Form 2106, Employee Business Expenses 
B) No form, the expenses are not deductible by the employee 
C) Schedule D 
D) Schedule R 
E) Schedule C

Question 7

​Frank was so entertained by the Paris Symphony on his visit to France that he mailed them a donation of $100 to support their organization as soon as he returned home to Seattle. Frank may deduct the charitable contribution to the Paris Symphony on his U.S. tax return.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is correct for Qualified Tuition Programs for 2015?

Accepted Answer

A) Contributions are deductible and qualified educational expense distributions are tax-free. 
B) Contributions are not deductible and qualified educational expense distributions are tax-free. 
C) Contributions are deductible and qualified educational expense distributions are taxable. 
D) Contributions are not deductible and qualified educational expense distributions are taxable. 
A) Contributions are deductible and qualified educational expense distributions are tax-free. 
B) Contributions are not deductible and qualified educational expense distributions are tax-free. 
C) Contributions are deductible and qualified educational expense distributions are taxable. 
D) Contributions are not deductible and qualified educational expense distributions are taxable.

Question 9

Pat has a dependent daughter and files as head of household. She has AGI of $375,000. What percentage of the $4,000 personal exemption and $4,000 dependency exemption may she deduct on her 2014 income tax return?

Accepted Answer

A) 0 percent 
B) 74 percent 
C) 26 percent 
D) 37 percent 
E) ​100 percent 
A) 0 percent 
B) 74 percent 
C) 26 percent 
D) 37 percent 
E) ​100 percent

Question 10

During the current tax year, Ruth, a nurse at Dr. Pan's office, incurred the following expenses:
If Ruth's adjusted gross income is $29,000, calculate her net miscellaneous deductions after the adjusted gross income percentage limitation.

Accepted Answer

$320 = $40 + $110 +

Question 11

Mortgage interest on a taxpayer's personal residence is not deductible on Schedule A.

Accepted Answer

A) True 
 B)False

Question 12

For 2015, the investment interest expense deduction is limited to the taxpayer's net investment income.

Accepted Answer

A) True 
 B)False

Question 13

Jon, age 45, had adjusted gross income of $26,000 in 2015. During the year, he incurred and paid the following medical expenses: Jon received $900 in 2015 as a reimbursement for a portion of the doctors' fees. If Jon were to itemize his deductions, what would be his allowable medical expense deduction after the adjusted gross income limitation is taken into account?

Accepted Answer

A) $0 
B) $425 
C) $600 
D) $1,000 
E) None of the above 
A) $0 
B) $425 
C) $600 
D) $1,000 
E) None of the above

Question 14

To deduct interest paid with respect to indebtedness, the taxpayer must be legally liable for the debt.

Accepted Answer

A) True 
 B)False

Question 15

An employee may deduct the cost of welder's safety goggles used at work as a miscellaneous itemized deduction.

Accepted Answer

A) True 
 B)False

Question 16

Ellen and Rick are married with one dependent child. They have AGI of $355,300, and itemized deductions consisting of $20,000 state income taxes and $20,000 medical expenses, after applying the 10 percent of AGI limitation.
​
Compute the following for 2015:
​
a.Itemized deductions allowed after the phase-out for high-income taxpayers.
b.Exemption deductions (ordinarily $4,000 x 3) after the high-income phase-out.
c.Taxable income.

Accepted Answer

a. Itemized deductions are $38,638 = $40

Question 17

Rob's employer has an accountable plan for employee expenses. His employer reimburses him for $1,000 of professional dues and subscriptions.
a.How much of the reimbursement must Rob include in income?
b.How much can Rob claim as a miscellaneous itemized deduction subject to the 2 percent floor?

Accepted Answer

The answer of Rob's employer has an accountable plan for...

Question 18

For 2015, Eugene and Linda had adjusted gross income of $30,000. Additional information for 2015 is as follows: What is the maximum amount that they can use as a deduction for charitable contributions for 2015?

Accepted Answer

A) $500 
B) $1,600 
C) $1,700 
D) $2,000 
E) None of the above 
A) $500 
B) $1,600 
C) $1,700 
D) $2,000 
E) None of the above

Question 19

Shellie, a single individual, received her Bachelor's degree in 2014, and took a job with a salary of $45,000 per year. In 2015, she began paying interest on qualified education loans. She was able to pay $1,500 in 2015. Which of the following statements is not correct?

Accepted Answer

A) The full $1,500 is deductible in arriving at adjusted gross income (AGI). 
B) If her payment had been $3,000, only $2,500 would have been deductible in arriving at AGI and the $500 excess would have been treated as nondeductible consumer interest. 
C) If her income had been $80,000, the deductible amount would have been phased out. 
D) Taxpayers are not allowed a deduction for education loan interest in 2015. 
A) The full $1,500 is deductible in arriving at adjusted gross income (AGI). 
B) If her payment had been $3,000, only $2,500 would have been deductible in arriving at AGI and the $500 excess would have been treated as nondeductible consumer interest. 
C) If her income had been $80,000, the deductible amount would have been phased out. 
D) Taxpayers are not allowed a deduction for education loan interest in 2015.

Question 20

During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he elects to deduct state and local income taxes?

Accepted Answer

A) $1,100 
B) $1,150 
C) $1,400 
D) $2,000 
E) None of the above 
A) $1,100 
B) $1,150 
C) $1,400 
D) $2,000 
E) None of the above

Unreimbursed employee business expenses are miscellaneous itemized deductions, subject to the 2 percent of adjusted gross income limitation.

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Meade paid $5,000 of state income taxes in 2015. The total sales tax he paid during 2015 was $4,500, which included $3,000 for the cost of a new boat. How should Meade treat the taxes paid in his 2015 tax return?

During the current year, Cary and Bill incurred acquisition debt on their residence of $1,300,000 and a home equity loan of $200,000. On a joint tax return, what is the amount of their qualified acquisition debt and qualified home equity debt, respectively?

What income tax form does an employee use to report business expenses that are not reimbursed by an employer under an accountable plan?

Frank was so entertained by the Paris Symphony on his visit to France that he mailed them a donation of $100 to support their organization as soon as he returned home to Seattle. Frank may deduct the charitable contribution to the Paris Symphony on his U.S. tax return.

Which of the following is correct for Qualified Tuition Programs for 2015?

Pat has a dependent daughter and files as head of household. She has AGI of $375,000. What percentage of the $4,000 personal exemption and $4,000 dependency exemption may she deduct on her 2014 income tax return?

During the current tax year, Ruth, a nurse at Dr. Pan's office, incurred the following expenses: If Ruth's adjusted gross income is $29,000, calculate her net miscellaneous deductions after the adjusted gross income percentage limitation.

Mortgage interest on a taxpayer's personal residence is not deductible on Schedule A.

For 2015, the investment interest expense deduction is limited to the taxpayer's net investment income.

To deduct interest paid with respect to indebtedness, the taxpayer must be legally liable for the debt.

An employee may deduct the cost of welder's safety goggles used at work as a miscellaneous itemized deduction.

Rob's employer has an accountable plan for employee expenses. His employer reimburses him for $1,000 of professional dues and subscriptions. a.How much of the reimbursement must Rob include in income? b.How much can Rob claim as a miscellaneous itemized deduction subject to the 2 percent floor?

For 2015, Eugene and Linda had adjusted gross income of $30,000. Additional information for 2015 is as follows: What is the maximum amount that they can use as a deduction for charitable contributions for 2015?

Shellie, a single individual, received her Bachelor's degree in 2014, and took a job with a salary of $45,000 per year. In 2015, she began paying interest on qualified education loans. She was able to pay $1,500 in 2015. Which of the following statements is not correct?

During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he elects to deduct state and local income taxes?

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

Unreimbursed employee business expenses are miscellaneous itemized deductions, subject to the 2 percent of adjusted gross income limitation.

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Meade paid $5,000 of state income taxes in 2015. The total sales tax he paid during 2015 was $4,500, which included $3,000 for the cost of a new boat. How should Meade treat the taxes paid in his 2015 tax return?

During the current year, Cary and Bill incurred acquisition debt on their residence of $1,300,000 and a home equity loan of $200,000. On a joint tax return, what is the amount of their qualified acquisition debt and qualified home equity debt, respectively?

What income tax form does an employee use to report business expenses that are not reimbursed by an employer under an accountable plan?

​Frank was so entertained by the Paris Symphony on his visit to France that he mailed them a donation of $100 to support their organization as soon as he returned home to Seattle. Frank may deduct the charitable contribution to the Paris Symphony on his U.S. tax return.

Which of the following is correct for Qualified Tuition Programs for 2015?

Pat has a dependent daughter and files as head of household. She has AGI of $375,000. What percentage of the $4,000 personal exemption and $4,000 dependency exemption may she deduct on her 2014 income tax return?

During the current tax year, Ruth, a nurse at Dr. Pan's office, incurred the following expenses: If Ruth's adjusted gross income is $29,000, calculate her net miscellaneous deductions after the adjusted gross income percentage limitation.

Mortgage interest on a taxpayer's personal residence is not deductible on Schedule A.

For 2015, the investment interest expense deduction is limited to the taxpayer's net investment income.

To deduct interest paid with respect to indebtedness, the taxpayer must be legally liable for the debt.

An employee may deduct the cost of welder's safety goggles used at work as a miscellaneous itemized deduction.

Rob's employer has an accountable plan for employee expenses. His employer reimburses him for $1,000 of professional dues and subscriptions. a.How much of the reimbursement must Rob include in income? b.How much can Rob claim as a miscellaneous itemized deduction subject to the 2 percent floor?

For 2015, Eugene and Linda had adjusted gross income of $30,000. Additional information for 2015 is as follows: What is the maximum amount that they can use as a deduction for charitable contributions for 2015?

Shellie, a single individual, received her Bachelor's degree in 2014, and took a job with a salary of $45,000 per year. In 2015, she began paying interest on qualified education loans. She was able to pay $1,500 in 2015. Which of the following statements is not correct?

During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he elects to deduct state and local income taxes?

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

Frank was so entertained by the Paris Symphony on his visit to France that he mailed them a donation of $100 to support their organization as soon as he returned home to Seattle. Frank may deduct the charitable contribution to the Paris Symphony on his U.S. tax return.