A review of the 2019 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2019 tax status: \[\begin{array} { | l | r | } \hline \text { Adjusted gross income } & \$ 40,000 \\ \hline \text { Medical expenses (before percentage limit) } & 5,000 \\ \hline \text { Itemized deductions other than medical } & 12,000 \\ \hline 2019 \text { potential standard deduction } & 12,200 \\ \hline \end{array}\] In 2020,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

A) include $800 in gross income for 2020. B) include $1,200 in gross income for 2020. C) reduce 2020's medical expenses by $1,200. D) amend the 2019 return. A) include $800 in gross income for 2020. B) include $1,200 in gross income for 2020. C) reduce 2020's medical expenses by $1,200. D) amend the 2019 return. A

During the year Jason and Kristi,cash-basis taxpayers,paid the following taxes: \[\begin{array} { | l | r | } \hline \text { State gift tax } & \$ 1,000 \\ \hline \text { Property tax on home in the United States } & 4,100 \\ \hline \text { State income tax (withholdings) } & 3,000 \\ \hline \text { Estimated federal income tax } & 4,500 \\ \hline \text { Sstimated state income tax (paid by check) } & 800 \\ \hline \text { Special assessment by city for sidewalks and street } & \\ \text { lighting on their street } & 2,000 \\ \hline \end{array}\] What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in the current year?

A) $7,900 B) $8,900 C) $10,900 D) $15,400 A) $7,900 B) $8,900 C) $10,900 D) $15,400

Westin paid the following taxes this year: \[\begin{array} {| l | r | } \hline \text { Real estate taxes on rental property he owns } & \$ 4,000 \\ \hline \text { Real estate taxes on his own residence } & 3,600 \\ \hline \text { Federal income taxes } & 18,000 \\ \hline \text { State income taxes } & 5,400 \\ \hline \text { Local city income taxes } & 1,500 \\ \hline \end{array}\] What amount can Arun deduct as an itemized deduction on his tax return?

A) $10,000 B) $28,500 C) $10,500 D) $14,500 A) $10,000 B) $28,500 C) $10,500 D) $14,500

Mitzi's 2019 medical expenses include the following: \[\begin{array} { |l | r |} \hline \text { Medical premiums } & \$ 10,850 \\ \hline \text { Doctors fees } & 2,000 \\ \hline \text { Hospital fees } & 3,350 \\ \hline \text { Prescription drugs } & 600 \\ \hline \text { Eyeglasses } & 350 \\ \hline \text { General purpose vitamins } & 100 \\ \hline \end{array}\] Mitzi's AGI for the year is $33,000.She is single and age 49.None of the medical costs are reimbursed by insurance.After considering the AGI floor,Mitzi's medical expense deduction is

A) $12,900. B) $13,850. C) $14,675. D) $16,325. A) $12,900. B) $13,850. C) $14,675. D) $16,325.

Phuong has the following sources of investment income: \[\begin{array} { | l | r | } \hline \text { Money market account interest } & \$ 2,000 \\ \hline \text { Interest on State of New York bond } & 1,000 \\ \hline \text { Dividends from domestic stocks } & 3,000 \\ \hline \text { Long-term capital gain } & 4,000 \\ \hline \text { Short-term capital gain } & 5,000 \\ \hline \end{array}\] Barring any special elections,how much of the investment income will be included in calculating net investment income for purposes of the investment interest expense limitation?

A) $2,000 B) $7,000 C) $5,000 D) $15,000 A) $2,000 B) $7,000 C) $5,000 D) $15,000

Exam 24: Itemized Deductions

A review of the 2019 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2019 tax status: Adjusted gross income \ 40,000 Medical expenses (before percentage limit) 5,000 Itemized deductions other than medical 12,000 2019 potential standard deduction 12,200 In 2020,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

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(Multiple Choice)

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Question 1

Correct Answer:

Verified

Charitable contributions made to individuals are deductible if the individuals can show extreme financial need.

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(True/False)

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Question 2

Correct Answer:

Verified

False

For charitable contribution purposes,capital gain property includes property which,if sold,would produce a long-term capital gain.

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(True/False)

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Question 3

Correct Answer:

Verified

True

During the year Jason and Kristi,cash-basis taxpayers,paid the following taxes: State gift tax \ 1,000 Property tax on home in the United States 4,100 State income tax (withholdings) 3,000 Estimated federal income tax 4,500 Sstimated state income tax (paid by check) 800 Special assessment by city for sidewalks and street lighting on their street 2,000 What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in the current year?

(Multiple Choice)

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Question 4

Doris donated a diamond brooch recently appraised at $25,000 to her local church.Doris had purchased it many years ago for $10,000.The church sold the brooch to provide funding for church programming.Doris' AGI is $40,000.Doris will be able to take a charitable deduction of

(Multiple Choice)

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Question 5

Capital expenditures incurred for medical purposes which permanently improve or better the taxpayer's property are deductible,but only to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure.

(True/False)

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Question 6

Due to stress on the job,taxpayer Fiona began to experience anxiety attacks.Her doctor advised her to engage in some relaxation activities.Fiona enrolled in yoga lessons.The cost of the yoga lessons to alleviate this medical condition is tax deductible.

(True/False)

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Question 7

The definition of medical care includes preventive measures such as routine physical examinations.

(True/False)

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Question 8

Westin paid the following taxes this year: Real estate taxes on rental property he owns \ 4,000 Real estate taxes on his own residence 3,600 Federal income taxes 18,000 State income taxes 5,400 Local city income taxes 1,500 What amount can Arun deduct as an itemized deduction on his tax return?

(Multiple Choice)

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Question 9

Hugh contributes a painting to a local museum for display.His AGI is $35,000.Hugh paid $16,000 for the painting in 2000,but its market value at the date of the contribution is $22,000.If Hugh makes the election to maximize the current year deduction,his deductible contribution for this year will be

(Multiple Choice)

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Question 10

Mitzi's 2019 medical expenses include the following: Medical premiums \ 10,850 Doctors fees 2,000 Hospital fees 3,350 Prescription drugs 600 Eyeglasses 350 General purpose vitamins 100 Mitzi's AGI for the year is $33,000.She is single and age 49.None of the medical costs are reimbursed by insurance.After considering the AGI floor,Mitzi's medical expense deduction is

(Multiple Choice)

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Question 11

Hui pays self-employment tax on her sole proprietorship income,supplemental Medicare surtaxes on excess wages and self-employment income (the .09% tax),and supplemental Medicare taxes on investment income (the 3.8% tax).Which of the following statements is correct regarding the deductibility of these taxes?

(Multiple Choice)

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Question 12

Phuong has the following sources of investment income: Money market account interest \ 2,000 Interest on State of New York bond 1,000 Dividends from domestic stocks 3,000 Long-term capital gain 4,000 Short-term capital gain 5,000 Barring any special elections,how much of the investment income will be included in calculating net investment income for purposes of the investment interest expense limitation?

(Multiple Choice)

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Question 13

An accrual-basis corporation can only deduct contributions made by year-end.

(True/False)

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Question 14

Sophie is a 50% partner in a glass company.She is in the top tax bracket.The partnership has generated $3 million of qualified business income.The partnership paid W-2 wages of $880,000 and owns depreciable tangible property with an unadjusted basis of $1.2 million.What is Saskia's qualified business income deduction (ignoring self-employment taxes)?

(Essay)

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Question 15

Acquisition indebtedness for a personal residence includes debt incurred to substantially improve the residence.

(True/False)

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Question 16

If a prepayment is a requirement for the receipt of the medical care,the payment is deductible in the year paid rather than the year in which the care is rendered.

(True/False)

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Question 17

Assessments made against real estate for the purpose of funding new street lights are not deductible in the year paid but rather should be added to the cost basis of the property.

(True/False)

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Question 18

In the current year,Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense.What is the maximum amount of investment interest expense she is allowed to deduct this year?

(Multiple Choice)

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Question 19

Viviana is an owner of a business that produces chocolate.She will be allowed the qualified business income deduction if the business is operated in any of the following forms except the

(Multiple Choice)

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Question 20

Showing 1 - 20 of 109

Exam 24: Itemized Deductions

Charitable contributions made to individuals are deductible if the individuals can show extreme financial need.

For charitable contribution purposes,capital gain property includes property which,if sold,would produce a long-term capital gain.

Doris donated a diamond brooch recently appraised at $25,000 to her local church.Doris had purchased it many years ago for $10,000.The church sold the brooch to provide funding for church programming.Doris' AGI is $40,000.Doris will be able to take a charitable deduction of

Capital expenditures incurred for medical purposes which permanently improve or better the taxpayer's property are deductible,but only to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure.

Due to stress on the job,taxpayer Fiona began to experience anxiety attacks.Her doctor advised her to engage in some relaxation activities.Fiona enrolled in yoga lessons.The cost of the yoga lessons to alleviate this medical condition is tax deductible.

The definition of medical care includes preventive measures such as routine physical examinations.

Westin paid the following taxes this year: Real estate taxes on rental property he owns \ 4,000 Real estate taxes on his own residence 3,600 Federal income taxes 18,000 State income taxes 5,400 Local city income taxes 1,500 What amount can Arun deduct as an itemized deduction on his tax return?

Hugh contributes a painting to a local museum for display.His AGI is $35,000.Hugh paid $16,000 for the painting in 2000,but its market value at the date of the contribution is $22,000.If Hugh makes the election to maximize the current year deduction,his deductible contribution for this year will be

An accrual-basis corporation can only deduct contributions made by year-end.

Acquisition indebtedness for a personal residence includes debt incurred to substantially improve the residence.

If a prepayment is a requirement for the receipt of the medical care,the payment is deductible in the year paid rather than the year in which the care is rendered.

Assessments made against real estate for the purpose of funding new street lights are not deductible in the year paid but rather should be added to the cost basis of the property.

In the current year,Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense.What is the maximum amount of investment interest expense she is allowed to deduct this year?

Viviana is an owner of a business that produces chocolate.She will be allowed the qualified business income deduction if the business is operated in any of the following forms except the

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