Exam 6: Individual Deductions

Glenn is an accountant who races stock cars as a hobby.This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races.What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

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?

To be deductible,business expenses must be directly related to a business activity.

Max,a single taxpayer,has a $270,000 loss from his sole proprietorship.How much of this loss is not deductible after considering the excess business loss rules?

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?

Excess business losses are carried back and then forward as net operating losses.

Han is a self-employed carpenter and his wife,Christine,works full time as a grade school teacher.Han paid $525 for carpentry tools and supplies,and Christine paid $3,600 as her share of health insurance premiums (not with pretax dollars)for Han and herself in a qualified plan provided by the school district (not through an exchange).Which of the following is a true statement?

Toshiomi works as a sales representative and travels extensively for his employer's business.This year Toshiomi was paid $75,000 in salary and made the following expenditures: Toshiomi also made a number of trips to Las Vegas for gambling.This year Toshiomi won $12,000 in a poker tournament,and this amount was almost enough to offset his other gambling losses ($13,420).Calculate Toshiomi's 2019 taxable income if he files single.

All business expense deductions are claimed as "below the line" deductions.

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

This year Darcy made the following charitable contributions: Determine the maximum amount of charitable deduction for Darcy's contribution of the painting if her AGI is $80,000 this year.You may assume that both the stock and painting have been owned for 10 years and that the painting was used by the State Art Museum in a manner consistent with the museum's charitable purpose.

Which of the following is a true statement?

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Which of the following costs is NOT deductible as an itemized medical expense?

Which of the following is a true statement?

Deductible medical expenses include payments to medical care providers such as doctors,dentists,and nurses and medical care facilities such as hospitals.

Max,a single taxpayer,has a $270,000 loss from his sole proprietorship.How much of this loss is deductible after considering the excess business loss rules?

This year Norma,a single taxpayer,paid $11,200 of real estate taxes on her personal residence and $9,500 of state income taxes.Which of the following is true?

Which of the following costs are deductible as an itemized medical expense?

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?