Question 1

Which of the following is not deductible as a medical expense on Schedule A?

Accepted Answer

A) Payments to a nurse 
B) Payments for marriage counseling 
C) Payments for dentures 
D) Payments for psychiatric care 
E) All of the above are deductible as medical expenses 
A) Payments to a nurse 
B) Payments for marriage counseling 
C) Payments for dentures 
D) Payments for psychiatric care 
E) All of the above are deductible as medical expenses

Question 2

If a ballet dancer seeks work as a ditch digger,the expenses of job hunting may be deductible.

Accepted Answer

A) True 
 B)False

Question 3

Rachel's employer does not have an accountable plan for employee expenses.Her employer reimburses her for $3,000 of business travel expenses.
a.How much of the reimbursement must Rachel include in income?
b.How much can Rachel take as a miscellaneous itemized deduction subject to the 2 percent floor?

Accepted Answer

The answer of Rachel's employer does not have an accountable...

Question 4

Stewart had adjusted gross income of $22,000 in 2013.During the year,he made the following contributions to qualified charities: $5,000 cash
1,000 shares of Able Corporation common stock,acquired in 1979 cost and fair market value of $7,000)
Considering the charitable contribution deduction limitation,what amount can Stewart claim as a deduction for charitable contributions in 2013?

Accepted Answer

A) $6,600 
B) $11,000 
C) $11,600 
D) $12,000 
E) None of the above 
A) $6,600 
B) $11,000 
C) $11,600 
D) $12,000 
E) None of the above

Question 5

Matthew purchases a new principal residence in 2013 and pays points of $2,000 to obtain a mortgage loan.What is the proper tax treatment for the points paid?

Accepted Answer

A) The points are a nondeductible personal expense. 
B) The points must be amortized over the life of the loan. 
C) The points are fully deductible in 2013. 
D) The points must be capitalized into the cost of the residence. 
E) The points must be amortized over 5 years. 
A) The points are a nondeductible personal expense. 
B) The points must be amortized over the life of the loan. 
C) The points are fully deductible in 2013. 
D) The points must be capitalized into the cost of the residence. 
E) The points must be amortized over 5 years.

Question 6

Margo has $2,100 withheld from her wages for state income taxes during 2013.In March of 2013,she paid $300 in additional taxes for her 2012 state tax return.Her state income tax liability for 2013 is $2,500 and she pays the additional $400 when she files her 2013 state tax return in April of 2014.What amount should Margo deduct as an itemized deduction for state income taxes on her 2013 federal income tax return,assuming she elects to deduct state and local income taxes?

Accepted Answer

A) $2,100 
B) $2,400 
C) $2,500 
D) $2,800 
E) None of the above 
A) $2,100 
B) $2,400 
C) $2,500 
D) $2,800 
E) None of the above

Question 7

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows:

Accepted Answer

A) $2,000 of income to Jean should be reported 
B) Income to Jean and a corresponding miscellaneous deduction for Jean,subject to the 2 percent of AGI floor 
C) No taxable income should be reported to Jean 
D) $500 of income should be reported to Jean 
A) $2,000 of income to Jean should be reported 
B) Income to Jean and a corresponding miscellaneous deduction for Jean,subject to the 2 percent of AGI floor 
C) No taxable income should be reported to Jean 
D) $500 of income should be reported to Jean

Question 8

During 2013,Mary paid the following expenses: Prescription drugs $\quad \$ 470$
Aspirin and over the counter cold capsules $\quad \$ 130$
Hospital and doctors $\quad \$ 700$
Health in surance $\quad \$ 250$ What is the total amount of medical expenses before considering the limitation based on adjusted gross income)that would enter into the calculation of itemized deductions on Mary's 2013 income tax return?

Accepted Answer

A) $1,170 
B) $1,300 
C) $1,420 
D) $1,550 
E) None of the above 
A) $1,170 
B) $1,300 
C) $1,420 
D) $1,550 
E) None of the above

Question 9

A theft loss is deductible in the year the theft is discovered,even if the theft occurred in a prior year.

Accepted Answer

A) True 
 B)False

Question 10

During 2013,George,a salaried taxpayer,paid the following taxes which were not incurred in connection with a trade or business: $\begin{array}{ll}
\text { Federal in come tax (withheld by employer) } & \$ 1,500 \
\text { State income tax (withheld by employe) } & \$ 1,000\\text { FICA tax (withheld by employer) }&\$700\\text { Real property taxes }&\$900\\text { Federal auto gasoline taxes }&\$200\\text { Federal excise tax on telephone bills }&\$50
\end{array}$ What amount can George claim for 2013 as an itemized deduction for the taxes paid,assuming he elects to deduct state and local income taxes?

Accepted Answer

A) $4,350 
B) $2,850 
C) $1,900 
D) $1,000 
E) None of the above 
A) $4,350 
B) $2,850 
C) $1,900 
D) $1,000 
E) None of the above

Question 11

Casualty and theft losses must be reduced by amounts recovered from insurance coverage.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Tom is employed by a large consulting firm.His employer has an accountable expense reimbursement plan.Tom paid for $3,000 of travel expenses which were directly reimbursed under the plan.How will the travel expenses be treated in Tom's tax return?

Accepted Answer

Tom does not include any of the $3,000 e

Question 14

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

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

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 $11,000 for the year.
Calculate the amount of their deduction for interest paid on qualified residence acquisition debt and qualified home equity debt for 2013.
Qualified residence acquisition debt interest:
Qualified home equity debt interest:

Accepted Answer

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

Question 17

Alicia is a single taxpayer with AGI of $350,000 and itemized deductions of $100,000 which are made up of $30,000 of mortgage interest,$30,000 of state income taxes and property taxes,and $40,000 of contributions to her temple.What is the amount of itemized deductions that Alicia may deduct on her 2013 income tax return after the phase-out for high-income taxpayers?

Accepted Answer

A) $100,000 
B) $97,000 
C) $70,000 
D) $3,000 
A) $100,000 
B) $97,000 
C) $70,000 
D) $3,000

Question 18

The cost of an appraisal of a painting may be deducted if the purpose of the appraisal is related to the preparation of an income tax return.

Accepted Answer

A) True 
 B)False

Question 19

Damage resulting from which of the following would probably not give rise to a casualty loss deduction?

Accepted Answer

A) Automobile accident 
B) Earthquake 
C) Flood 
D) Rust 
E) Fire 
A) Automobile accident 
B) Earthquake 
C) Flood 
D) Rust 
E) Fire

Question 20

If business property is fully destroyed as a result of a casualty,the loss is equal to the decrease in the fair market value of the property.

Accepted Answer

A) True 
 B)False

Which of the following is not deductible as a medical expense on Schedule A?

If a ballet dancer seeks work as a ditch digger,the expenses of job hunting may be deductible.

Matthew purchases a new principal residence in 2013 and pays points of $2,000 to obtain a mortgage loan.What is the proper tax treatment for the points paid?

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows:

A theft loss is deductible in the year the theft is discovered,even if the theft occurred in a prior year.

Casualty and theft losses must be reduced by amounts recovered from insurance coverage.

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

Tom is employed by a large consulting firm.His employer has an accountable expense reimbursement plan.Tom paid for $3,000 of travel expenses which were directly reimbursed under the plan.How will the travel expenses be treated in Tom's tax return?

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

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

The cost of an appraisal of a painting may be deducted if the purpose of the appraisal is related to the preparation of an income tax return.

Damage resulting from which of the following would probably not give rise to a casualty loss deduction?

If business property is fully destroyed as a result of a casualty,the loss is equal to the decrease in the fair market value of the property.

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

Which of the following is not deductible as a medical expense on Schedule A?

If a ballet dancer seeks work as a ditch digger,the expenses of job hunting may be deductible.

Matthew purchases a new principal residence in 2013 and pays points of $2,000 to obtain a mortgage loan.What is the proper tax treatment for the points paid?

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows:

A theft loss is deductible in the year the theft is discovered,even if the theft occurred in a prior year.

Casualty and theft losses must be reduced by amounts recovered from insurance coverage.

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

Tom is employed by a large consulting firm.His employer has an accountable expense reimbursement plan.Tom paid for $3,000 of travel expenses which were directly reimbursed under the plan.How will the travel expenses be treated in Tom's tax return?

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

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

The cost of an appraisal of a painting may be deducted if the purpose of the appraisal is related to the preparation of an income tax return.

Damage resulting from which of the following would probably not give rise to a casualty loss deduction?

If business property is fully destroyed as a result of a casualty,the loss is equal to the decrease in the fair market value of the property.

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