Exam 4: Business Income and Expenses, Part II

Gary and Charlotte incurred the following expenses in connection with Gary's job transfer from Florida to South Carolina: House-hunting trip: Plane tickets \ 976 Hotel room \ 434 Meals \ 170 owing expenses: Cost of moving furniture \ 2,500 Transp ortation \ 95 Lodging \ 125 Meals \ 60 M How much is their qualified moving expense?

Which of the following statements is true?

For purposes of the passive loss rules,income is classified into three separate categories.What are the three categories of individual income? Give an example of each. 1) 2) 3)

In 2013,all taxpayers may make a deductible or nondeductible contribution to an IRA.

Warren invested in a limited partnership tax shelter in 2000.During 2013,his losses from the partnership amount to $100,000.If Warren has no passive income,what is the amount of Warren's deduction for passive losses for 2013?

Which of the following statements is correct?

Monica has a Roth IRA to which she contributed $15,000.The IRA has a current value of $37,500.She is 54 years old and takes a distribution of $25,000.How much of the distribution will be taxable to Monica?

Mike and Rose are married.Mike earns $45,000 from wages and Rose reports $350 on her Schedule C as an artist.Since Mike's work does not offer health insurance,Rose pays the following health insurance premiums from her business account: Family health insurance \ 9,500 Family dental insurance \ 1,000 How much can Mike and Rose deduct as self-employed health insurance?

What is the amount of the deductible HSA for each of the following taxpayers? a.Amelia and Albert,both age 43,have a qualifying high-deductible insurance plan.They contribute $5,700 to a family HSA. b.Betsy,who is single,72 years old and covered by Medicare,wants to contribute the maximum amount to an HSA. c.Carlo has health insurance through his employer which has low deductible amounts. He is 34 years old and is married.Carlo wants to contribute the maximum to an HSA. d.Diane is 57 years old.She has a qualifying high-deductible insurance plan.She has contributed $4,250 to her HSA.

Which of the following statements is false about health savings acounts HSAs)?

Christine is a self-employed graphics artist who has net earned income of $155,000 from her business.Christine has a defined contribution Keogh Plan and plans to contribute the maximum allowable.How much can Christine contribute?

If a taxpayer receives an early distribution from an IRA due to disability,he or she will not be subject to a penalty.

A taxpayer must make contributions to a regular or Roth IRA prior to the end of the year in order to claim the deduction for that year.

Under the passive loss rules,real estate rental activities are specifically defined as passive,even if the taxpayer actively manages the property.

Rob and Julie,both in their 30s,file a joint income tax return for 2013.Rob's wages are $25,000 and Julie's wages are $33,000 for the year.Their total adjusted gross income is $58,000,and Julie is covered by a qualified pension plan at work but Rob is not. a.What is the maximum amount that Rob and Julie may each contribute to their Roth IRAs? b.If Julie's wages are $110,000 for 2013,instead of $33,000,and their adjusted gross income is $135,000,1)what is the maximum amount that Rob and Julie may each deduct for contributions to their individual retirement accounts,and 2)what is the maximum amount they could each contribute to Roth IRAs instead?