Question 1

Which of the following is a true statement?

Accepted Answer

A) The standard deduction is increased for taxpayers who are blind or deaf at year-end. 
B) A married couple is only entitled to one addition to their standard deduction even if both spouses are over age 65. 
C) Bunching itemized deductions is a legal method of tax avoidance. 
D) The standard deduction is subject to a phase-out based on AGI. 
E) All of the choices are true. 
A) The standard deduction is increased for taxpayers who are blind or deaf at year-end. 
B) A married couple is only entitled to one addition to their standard deduction even if both spouses are over age 65. 
C) Bunching itemized deductions is a legal method of tax avoidance. 
D) The standard deduction is subject to a phase-out based on AGI. 
E) All of the choices are true.

Question 2

This year Latrell made the following charitable contributions:
   Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year.You may assume that the stock has been owned for 10 years.

Accepted Answer

The charitable deduction is $40,500 over

Question 3

Margaret Lindley paid $15,000 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000), $4,000 of interest on her $30,000 home-equity loan, $1,000 of credit card interest, and $3,000 of margin interest for the purchase of stock.Assume that Margaret Lindley has $10,000 of interest income this year and no investment expenses.How much of the interest expense may she deduct this year?

Accepted Answer

A) $23,000. 
B) $22,000. 
C) $19,000. 
D) $18,000. 
E) None of the choices are correct. 
A) $23,000. 
B) $22,000. 
C) $19,000. 
D) $18,000. 
E) None of the choices are correct.

Question 4

Opal fell on the ice and injured her hip this winter.As a result she paid $3,000 for a visit to the hospital emergency room and $750 for follow-up visits with her doctor.While she recuperated, Opal paid $500 for prescription medicine and $600 to a therapist for rehabilitation.Insurance reimbursed Opal $1,200 for these expenses.What is the amount of Opal's deductible medical expense before considering any AGI limitations?

Accepted Answer

A) $3,000. 
B) $3,750. 
C) $3,650. 
D) $4,850. 
E) All of the choices are correct. 
A) $3,000. 
B) $3,750. 
C) $3,650. 
D) $4,850. 
E) All of the choices are correct.

Question 5

Which of the following is a true statement?

Accepted Answer

A) A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B) A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C) A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D) Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E) All of these choices are true. 
A) A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B) A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C) A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D) Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E) All of these choices are true.

Question 6

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Accepted Answer

A) True 
 B)False

Question 7

Bunching itemized deductions is one form of tax evasion.

Accepted Answer

A) True 
 B)False

Question 8

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Accepted Answer

A) True 
 B)False

Question 9

Taxpayers are not allowed to deduct tax preparation fees as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 10

Campbell, a single taxpayer, has $95,000 of profits from her general store, which she operates as a sole proprietorship.She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income.How much is Campbell's deduction for qualified business income?

Accepted Answer

A) $95,000. 
B) $19,000. 
C) $10,000. 
D) $8,000. 
E) $0. 
A) $95,000. 
B) $19,000. 
C) $10,000. 
D) $8,000. 
E) $0.

Question 11

Simone donated a landscape painting (tangible capital gain property)to a library, a public charity.She purchased the painting five years ago for $50,000, and on the date of the gift, it had a fair market value of $200,000.What is her maximum charitable contribution deduction for the year if her AGI is $300,000?

Accepted Answer

A) $100,000. 
B) $200,000. 
C) $90,000 if the library uses the painting in its charitable purpose. 
D) $150,000. 
E) None of the choices are correct. 
A) $100,000. 
B) $200,000. 
C) $90,000 if the library uses the painting in its charitable purpose. 
D) $150,000. 
E) None of the choices are correct.

Question 12

Campbell, a single taxpayer, has $400,000 of profits from her general store, which she operates as a sole proprietorship.She has no employees, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income.How much is Campbell's deduction for qualified business income?

Accepted Answer

A) $100,000. 
B) $80,000. 
C) $20,000. 
D) $1,000. 
E) $0. 
A) $100,000. 
B) $80,000. 
C) $20,000. 
D) $1,000. 
E) $0.

Question 13

Erika (age 62)was hospitalized with injuries from an auto accident this year.She incurred the following expenses from the accident:
   In addition, Erika's auto was completely destroyed in the accident.She bought the car several years ago for $18,000 and it was worth $4,700 at the time of the accident.What are Erika's itemized deductions this year if she was uninsured and her AGI is $40,000?

Accepted Answer

$1,030 of medical expenses.
Th

Question 14

Which of the following is a true statement?

Accepted Answer

A) Taxpayers may only deduct interest on up to $1,500,000 of home acquisition indebtedness. 
B) Taxpayers may deduct interest on up to $1,000,000 of home-equity debt. 
C) The deduction for investment interest expense is not subject to limitation. 
D) A taxpayer who incurs acquisition indebtedness in 2018 may only deduct interest on up to $750,000 of home acquisition indebtedness. 
E) None of the choices are true. 
A) Taxpayers may only deduct interest on up to $1,500,000 of home acquisition indebtedness. 
B) Taxpayers may deduct interest on up to $1,000,000 of home-equity debt. 
C) The deduction for investment interest expense is not subject to limitation. 
D) A taxpayer who incurs acquisition indebtedness in 2018 may only deduct interest on up to $750,000 of home acquisition indebtedness. 
E) None of the choices are true.

Question 15

Rochelle, a single taxpayer (age 47), has an AGI of $300,000.This year, she paid medical expenses of $37,500, state income taxes of $4,000, mortgage interest of $10,600 on $250,000 acquisition debt for her home, and charitable contributions of $6,000.What would be the amount of her total itemized deductions she may claim on her tax return?

Accepted Answer

Rochelle's itemized

Question 16

Campbell, a single taxpayer, has $400,000 of profits from her general store, which she operates as a sole proprietorship.She has $100,000 of employee wages, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income.How much is Campbell's deduction for qualified business income?

Accepted Answer

A) $100,000. 
B) $80,000. 
C) $50,000. 
D) $26,000. 
E) $0. 
A) $100,000. 
B) $80,000. 
C) $50,000. 
D) $26,000. 
E) $0.

Question 17

Rachel is an engineer who practices as a sole proprietor.This year, Rachel had net business income of $400,000 from her business.Assume that Rachel pays $150,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment he purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $380,000.Calculate Rachel's deduction for qualified business income.

Accepted Answer

$75,000.
Engineering is a qualified trad

Question 18

Karin and Chad (ages 30 and 31, respectively)are married and together have $110,000 of AGI.This year they have recorded the following expenses:
   Karin and Chad will file married filing jointly.Calculate their taxable income.

Accepted Answer

$82,600 = $110,000 − ($16,640 mortgage i

Question 19

Madeoff donated stock (capital gain property)to a public charity.He purchased the stock three years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000.What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000?

Accepted Answer

A) $100,000 
B) $200,000 
C) $150,000 
D) $250,000 
E) None of the choices are correct 
A) $100,000 
B) $200,000 
C) $150,000 
D) $250,000 
E) None of the choices are correct

Question 20

This year Amanda paid $749 in federal gift taxes on a gratuitous transfer to her nephew.Amanda lives in Texas and does not pay any state or local income taxes.Which of the following is a true statement?

Accepted Answer

A) Amanda cannot deduct federal gift taxes. 
B) Amanda can deduct federal gift taxes for AGI. 
C) Amanda can deduct federal gift taxes paid as an itemized deduction. 
D) Amanda must include federal gift taxes with other miscellaneous itemized deductions. 
E) None of the choices are true. 
A) Amanda cannot deduct federal gift taxes. 
B) Amanda can deduct federal gift taxes for AGI. 
C) Amanda can deduct federal gift taxes paid as an itemized deduction. 
D) Amanda must include federal gift taxes with other miscellaneous itemized deductions. 
E) None of the choices are true.

Which of the following is a true statement?

This year Latrell made the following charitable contributions: Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year.You may assume that the stock has been owned for 10 years.

Which of the following is a true statement?

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Bunching itemized deductions is one form of tax evasion.

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Taxpayers are not allowed to deduct tax preparation fees as an itemized deduction.

Which of the following is a true statement?

Karin and Chad (ages 30 and 31, respectively)are married and together have $110,000 of AGI.This year they have recorded the following expenses: Karin and Chad will file married filing jointly.Calculate their taxable income.

Madeoff donated stock (capital gain property)to a public charity.He purchased the stock three years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000.What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000?

This year Amanda paid $749 in federal gift taxes on a gratuitous transfer to her nephew.Amanda lives in Texas and does not pay any state or local income taxes.Which of the following is a true statement?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Filters

Exam 7: Individual From Agi Deductions

Which of the following is a true statement?

This year Latrell made the following charitable contributions: Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year.You may assume that the stock has been owned for 10 years.

Which of the following is a true statement?

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Bunching itemized deductions is one form of tax evasion.

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Taxpayers are not allowed to deduct tax preparation fees as an itemized deduction.

Which of the following is a true statement?

Karin and Chad (ages 30 and 31, respectively)are married and together have $110,000 of AGI.This year they have recorded the following expenses: Karin and Chad will file married filing jointly.Calculate their taxable income.

Madeoff donated stock (capital gain property)to a public charity.He purchased the stock three years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000.What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000?

This year Amanda paid $749 in federal gift taxes on a gratuitous transfer to her nephew.Amanda lives in Texas and does not pay any state or local income taxes.Which of the following is a true statement?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Filters