Question 1

A taxpayer who is a partner in a partnership can only claim the qualified business income deduction if he itemizes his deductions.

Accepted Answer

A) True 
 B)False

Question 2

Investment interest expense is deductible

Accepted Answer

A) as an offset to net investment income. 
B) as a capital loss. 
C) as an itemized deduction. 
D) as a deduction for AGI. 
A) as an offset to net investment income. 
B) as a capital loss. 
C) as an itemized deduction. 
D) as a deduction for AGI.

Question 3

Marcia,who is single,finished graduate school this year and began repaying her student loan.The proceeds of the loan were used to pay her qualified higher education expenses.She has not received any type of educational assistance or scholarships.The amount of interest paid during the year amounted to $3,000.What is the amount and classification of her student loan interest deduction if her AGI is $73,000?

Accepted Answer

A) $500 for AGI 
B) $2,000 for AGI 
C) $2,500 for AGI 
D) $3,000 for AGI 
A) $500 for AGI 
B) $2,000 for AGI 
C) $2,500 for AGI 
D) $3,000 for AGI

Question 4

All of the following are deductible as medical expenses except

Accepted Answer

A) vitamins and health foods that improve a taxpayer's general health. 
B) payments for a vision exam and contact lenses. 
C) payments to a hospital for laboratory fees and X-rays for diagnosis of a medical problem. 
D) cosmetic surgery necessary to correct a deformity arising from a congenital abnormality. 
A) vitamins and health foods that improve a taxpayer's general health. 
B) payments for a vision exam and contact lenses. 
C) payments to a hospital for laboratory fees and X-rays for diagnosis of a medical problem. 
D) cosmetic surgery necessary to correct a deformity arising from a congenital abnormality.

Question 5

Foreign real property taxes and foreign income taxes are not deductible as itemized deductions.

Accepted Answer

A) True 
 B)False

Question 6

A taxpayer has made substantial donations of both cash and capital gain property public charities.Due to lower income this year,the taxpayer could exceed the charitable contribution ceilings.The taxpayer will apply the 60% AGI ceiling before applying the 30% AGI ceiling.

Accepted Answer

A) True 
 B)False

Question 7

Medical expenses are deductible as a from AGI deduction to the extent that they exceed 2 percent of the taxpayer's AGI in 2019.

Accepted Answer

A) True 
 B)False

Question 8

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Accepted Answer

A) True 
 B)False

Question 9

Caleb's 2019 medical expenses before reimbursement for the year include the following: $$\begin{array} { | l | r | } 
\hline \text { Medical premiums } & \$ 11,000 \
\hline \text { Doctors, hospitals } & 3,500 \
\hline \text { Prescriptions } & 600 \
\hline
\end{array}$$ Caleb's AGI for the year is $50,000.He is single and age 58.Caleb also receives a reimbursement for medical expenses of $1,000.Caleb's deductible medical expenses that will be added to the other itemized deduction will be

Accepted Answer

A) $10,350. 
B) $9,100. 
C) $14,100. 
D) $10,100. 
A) $10,350. 
B) $9,100. 
C) $14,100. 
D) $10,100.

Question 10

Patrick's records for the current year contain the following information: -He donated stock having a fair market value of $5,000 to a qualified charitable organization.Patrick acquired the stock two years ago at a cost of $3,000.
-He donated 20 hours of his time as a professional plumber to a qualified charitable organization.He bills his time to his customers at $50 per hour.
-He also donated $7,500 cash to a qualified charitable organization.
Patrick's adjusted gross income for the year is $100,000.What is the amount of his charitable contribution deduction?

Accepted Answer

A) $10,500 
B) $11,500 
C) $12,500 
D) $13,500 
A) $10,500 
B) $11,500 
C) $12,500 
D) $13,500

Question 11

In general,the deductibility of interest depends on the purpose for which the indebtedness is incurred.

Accepted Answer

A) True 
 B)False

Question 12

Christa has made a $25,000 pledge to the American Red Cross (a public charity).Christa expects AGI of $200,000 this year.Which of the following assets should she donate?

Accepted Answer

A) $25,000 of cash 
B) stock purchased three years ago for $18,000 with a current FMV of $25,000 
C) stock purchased six months ago for $28,000 with a current FMV of $25,000 
D) Christa should be indifferent among the three choices. 
A) $25,000 of cash 
B) stock purchased three years ago for $18,000 with a current FMV of $25,000 
C) stock purchased six months ago for $28,000 with a current FMV of $25,000 
D) Christa should be indifferent among the three choices.

Question 13

Special documentation rules apply to donation of

Accepted Answer

A) motor vehicles. 
B) boats. 
C) airplanes. 
D) all of the above. 
A) motor vehicles. 
B) boats. 
C) airplanes. 
D) all of the above.

Question 14

In order for a taxpayer to deduct a medical expense,the amount must be paid to a licensed physician.

Accepted Answer

A) True 
 B)False

Question 15

Ann is a senior partner in a very profitable Wall Street law firm operated as a partnership.She is in the top tax bracket.Ann will not be allowed the qualified business income deduction.

Accepted Answer

A) True 
 B)False

Question 16

Van pays the following medical expenses this year: • $1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse.
• $300 for Van's eyeglasses.
• $900 for Van's dental work.
• $3,800 for Van's face lift.Van,a newscaster,is worried about the wrinkles around his eyes.
How much can Van include on his return as qualified medical expenses before limitation?

Accepted Answer

A) $1,200 
B) $2,400 
C) $2,700 
D) $6,500 
A) $1,200 
B) $2,400 
C) $2,700 
D) $6,500

Question 17

An individual makes substantial cash contributions to public charities.He will be able to deduct these contribution up to a ceiling of 50% of AGI.

Accepted Answer

A) True 
 B)False

Question 18

Peter is assessed $630 for street improvements in front of his house.Which of the following statements is correct?

Accepted Answer

A) Peter must deduct the assessment as a tax. 
B) Peter must reduce the property basis by $630. 
C) Peter must increase the property basis by $630. 
D) Peter can elect to deduct the $630 currently or increase the basis in the property. 
A) Peter must deduct the assessment as a tax. 
B) Peter must reduce the property basis by $630. 
C) Peter must increase the property basis by $630. 
D) Peter can elect to deduct the $630 currently or increase the basis in the property.

Question 19

Erin's records reflect the following information: 1.Paid $200 dues to a fraternal organization (such as the Elks Club).
2)Donated stock having a fair market value of $3,500 to a qualified charitable organization.She purchased the stock 2 years earlier for $3,000.
3)Paid $1,600 cash to qualified public charitable organizations.
Erin's adjusted gross income for this year was $50,000.What is the amount of her charitable contribution deduction for the year?

Accepted Answer

A) $4,600 
B) $4,800 
C) $5,100 
D) $5,300 
A) $4,600 
B) $4,800 
C) $5,100 
D) $5,300

Question 20

Riva borrows $10,000 that she intends to use for purchasing supplies for her business.She temporarily deposits the funds in her personal checking account.Prior to the deposit,the checking account held $40,000 of personal funds.Riva books a vacation for $6,000 and writes a check to the travel agency from her personal account.Later in the month,the business supplies bill arrives and Riva writes a check for $10,000 from the personal account.With respect to the interest expense on the $10,000 loan

Accepted Answer

A) it will all be treated as trade or business expense. 
B) 60 percent will be treated as personal interest expense and 40 percent as trade or business expense. 
C) it will all be treated as personal expense. 
D) 20 percent will be treated as trade or business expense. 
A) it will all be treated as trade or business expense. 
B) 60 percent will be treated as personal interest expense and 40 percent as trade or business expense. 
C) it will all be treated as personal expense. 
D) 20 percent will be treated as trade or business expense.

Exam 24: Itemized Deductions

A taxpayer who is a partner in a partnership can only claim the qualified business income deduction if he itemizes his deductions.

Investment interest expense is deductible

All of the following are deductible as medical expenses except

Foreign real property taxes and foreign income taxes are not deductible as itemized deductions.

A taxpayer has made substantial donations of both cash and capital gain property public charities.Due to lower income this year,the taxpayer could exceed the charitable contribution ceilings.The taxpayer will apply the 60% AGI ceiling before applying the 30% AGI ceiling.

Medical expenses are deductible as a from AGI deduction to the extent that they exceed 2 percent of the taxpayer's AGI in 2019.

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

In general,the deductibility of interest depends on the purpose for which the indebtedness is incurred.

Christa has made a $25,000 pledge to the American Red Cross (a public charity).Christa expects AGI of $200,000 this year.Which of the following assets should she donate?

Special documentation rules apply to donation of

In order for a taxpayer to deduct a medical expense,the amount must be paid to a licensed physician.

Ann is a senior partner in a very profitable Wall Street law firm operated as a partnership.She is in the top tax bracket.Ann will not be allowed the qualified business income deduction.

An individual makes substantial cash contributions to public charities.He will be able to deduct these contribution up to a ceiling of 50% of AGI.

Peter is assessed $630 for street improvements in front of his house.Which of the following statements is correct?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Business Expenses and Deferred Compensation

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods,tax Credits,and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

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