Exam 5: Itemized Deductions and Other Incentives

Peter is a plumber employed by a major contracting firm.During 2013,he paid the following miscellaneous expenses: Unreimbursed employee business expenses $\quad\$ 410$ Union dues $\quad\$ 600$ Tax return preparation fee $\quad\$ 100$ Safe deposit box rental fee (used only forpersonal effects) $\quad\$ 20$ If Peter were to itemize his deductions for 2013,what amount could he claim as miscellaneous itemized deductions before applying the 2 percent of adjusted gross income limitation)?

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?

Which one of the following is not tax deductible?

In 2013,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.

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

Catherine is a CPA employed by a large accounting firm in San Francisco.In 2013,she paid the following amounts: CPA Society dues $\quad\$ 200$ One year tax service $\quad \$ 700$ "Wiley Accountant" magazine $\quad\$ 70$ "Modern Sailing" magazine $\quad\$ 75$ How much may she deduct on Schedule A as a miscellaneous deduction,before considering 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.

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.

Weber resides in a state that imposes a tax on income.The following information relating to Weber's state income taxes is available: State income taxes withheld in $2013 \quad \$ 3,000$ Refund received in 2013 of 2012 tax $\quad \$ 300$ Assessment paid in 2013 of 2011 tax $\quad \$ 800$ Assuming he elects to deduct state and local income taxes,what amount should Weber use as state and local income taxes in calculating itemized deductions for his 2013 Federal income tax return?

Phillip,a single parent,would like to contribute $1,800 to an educational savings account for his 10-year- old son.His AGI is $100,000.Calculate the amount of the contribution he can make.

Kat has a small bungalow which burns up in a fire.Kat is not insured for fire.The bungalow originally cost $20,000,but was worth $45,000 before the fire.Kat has $30,000 of adjusted gross income.How much can Kat claim as a casualty loss in her tax return? Explain.

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?

In 2013,state income taxes may be deducted as an itemized deduction on Schedule A.

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?

The adjusted gross income AGI)limitation on medical expenses is 15 percent.

For married taxpayers filing a joint return in 2013,at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs Section 529 plans)start?

For the year ended December 31,2013,David,a married taxpayer filing a joint return,reported the following: In vestment income from interest $\quad \$ 24,000$ In vestment expenses other than interest $\quad\$ 4,000$ Interest expense on funds borrowed in 2005 to purchaseinvestment property $\quad\$ 70,000$ What is the maximum amount that David can deduct in 2013 as investment interest expense?

Roberto,age 50,has AGI of $110,000 for 2013.He has medical expenses of $12,000.How much of the medical expenses can Roberto deduct on his Schedule A for 2013?

Which of the following is not considered a deductible medical expense?

Which of the following is not an itemized deduction?