Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Jon and Holly are married and live in a retirement community. This year Jon celebrated his 65th birthday and Holly turned 68 years old. For their ages, both Jon and Holly are in good health. This year the only significant expense that they incurred was an unreimbursed medical expense of$3,200. If Jon and Holly together have AGI of $42,000, what is the amount of their standard deduction this year?

Accepted Answer

$15,200
The married joint stan

Question 3

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

Accepted Answer

A) True 
 B)False

Question 4

Colby is employed full time as a food technician for a local restaurant chain. This year he has incurred the following expenses associated with his employment:   Colby was reimbursed $125 of the expenses from his employer's accountable plan. What amount can he include with his remaining itemized deductions if his AGI this year is $32,000?

Accepted Answer

$1,025 = [($280 + $310 + $1,20

Question 5

Toshiomi works as a sales representative and travels extensively for his employer's business. This yearToshiomi 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). CalculateToshiomi's taxable income if he files single with one personal exemption.

Accepted Answer

$63,650 = 67,700 − 4,050 (personal exemp

Question 6

Last year Henry borrowed $15,000 to help pay for his dependent daughter's college tuition. This year Henry paid $2,800 of interest on the loan. How much, if any, interest can Henry deduct if he files single with AGI of $72,500?

Accepted Answer

$1,250
The deduction for student loan in

Question 7

Casey currently commutes 35 miles to work in the city. He is considering a newassignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Which of the following is a true statement?

Accepted Answer

A)  If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence. 
B)  To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles. 
C)  If Casey's move qualifies for the moving expense deduction, he can deduct half the cost of meals while en route to his new residence. 
D)  Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles. 
E)  All of the choices are false. 
A)  If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence. 
B)  To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles. 
C)  If Casey's move qualifies for the moving expense deduction, he can deduct half the cost of meals while en route to his new residence. 
D)  Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles. 
E)  All of the choices are false.

Question 8

Collin and Christine are married and file joint. Their dependent son, Trevor, is a full-time college student at a qualified educational institution. This year Collin and Christine borrowed $30,000 to pay for Trevor's tuition ($22,000) and room and board ($8,000). At year end Collin paid $3,200 in interest on the loan. What amounts can Collin and Christine deduct for interest and educationexpenses if they estimate that their AGI will be $138,000 absent any deductions for AGI? Assume the 2016 rules apply for purposes of the qualified education expense deduction.

Accepted Answer

$2,250 for interest and $2,000 for quali

Question 9

An individual who is eligible to be claimed as a dependent on another's return and has$1,000 of earned income may claim a standard deduction of $1,350.

Accepted Answer

A) True 
 B)False

Question 10

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 joint with two personal exemptions. Calculate their taxable income.

Accepted Answer

$82,800 = $110,000 − ($6,640 + $5,400 +

Question 11

Which of the following is a true statement?

Accepted Answer

A)  Taxpayers are not allowed to receive a moving allowance from their employers. 
B)  Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan. 
C)  The deduction for moving expenses is subject to a phase-out limitation. 
D)  The deduction for interest on educational loans is subject to a phase-out limitation. 
E)  All of the choices are false. 
A)  Taxpayers are not allowed to receive a moving allowance from their employers. 
B)  Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan. 
C)  The deduction for moving expenses is subject to a phase-out limitation. 
D)  The deduction for interest on educational loans is subject to a phase-out limitation. 
E)  All of the choices are false.

Question 12

This fall Manfred enrolled in the law school at State University (a qualified educational institution) and paid $6,200 in tuition. Until his enrollment Manfred worked as a stock broker and this year he reports $70,000 in wages. If Manfred files single and reports no other items of income or expense how much of the tuition can he deduct as a business expense?

Accepted Answer

A)  Manfred can deduct $6,200 as a miscellaneous itemized deduction. 
B)  Manfred can deduct half of his tuition as a miscellaneous itemized deduction. 
C)  Manfred can deduct half of his tuition for AGI. 
D)  Manfred can deduct $6,200 for AGI. 
E)  None - the tuition is not deductible as a business expense. 
A)  Manfred can deduct $6,200 as a miscellaneous itemized deduction. 
B)  Manfred can deduct half of his tuition as a miscellaneous itemized deduction. 
C)  Manfred can deduct half of his tuition for AGI. 
D)  Manfred can deduct $6,200 for AGI. 
E)  None - the tuition is not deductible as a business expense.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because:

Accepted Answer

A)  this deduction provides a measure of equity between employees and the self-employed. 
B)  employers are allowed to deduct social security (FIC
A)  taxes as a business expense. 
C)  health insurance premiums cannot be deducted otherwise. 
D)  self-employed taxpayers need an alternate mechanism for reducing the cost of health care. 
E)  None of the choices are correct. 
A)  this deduction provides a measure of equity between employees and the self-employed. 
B)  employers are allowed to deduct social security (FIC
A)  taxes as a business expense. 
C)  health insurance premiums cannot be deducted otherwise. 
D)  self-employed taxpayers need an alternate mechanism for reducing the cost of health care. 
E)  None of the choices are correct.

Question 16

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York78t)his year. During the trip Fred incurred the following unreimbursed expenses:   What is the amount of Fred's deduction before the application of any AGI limitations?

Accepted Answer

A)  $2,870. 
B)  $2,050. 
C)  $2,570. 
D)  $1,300. 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed. 
A)  $2,870. 
B)  $2,050. 
C)  $2,570. 
D)  $1,300. 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed.

Question 17

Grace is a single medical student at State University, a qualified educational institution.This year Grace paid university tuition of $12,000. Grace works part-time at the University library, and this year she reports $15,000 of salary and no other items of income or expense. Which of the following is a true statement?

Accepted Answer

A)  Grace can deduct all of her tuition for AGI as a business expense. 
B)  Grace can only deduct half of her tuition for AGI as a business expense. 
C)  Grace can deduct all of her tuition as a miscellaneous itemized deduction. 
D)  Grace can only deduct half of her tuition as a miscellaneous itemized deduction. 
E)  All of the choices are false. 
A)  Grace can deduct all of her tuition for AGI as a business expense. 
B)  Grace can only deduct half of her tuition for AGI as a business expense. 
C)  Grace can deduct all of her tuition as a miscellaneous itemized deduction. 
D)  Grace can only deduct half of her tuition as a miscellaneous itemized deduction. 
E)  All of the choices are false.

Question 18

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Max deduct as a qualifying education expense if he files single andreports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

Accepted Answer

A)  $0. 
B)  $4,000. 
C)  $5,000. 
D)  $2,000. 
E)  None of the choices are correct. 
A)  $0. 
B)  $4,000. 
C)  $5,000. 
D)  $2,000. 
E)  None of the choices are correct.

Question 19

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

Accepted Answer

A) True 
 B)False

Question 20

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Accepted Answer

A) True 
 B)False

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

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

Last year Henry borrowed $15,000 to help pay for his dependent daughter's college tuition. This year Henry paid $2,800 of interest on the loan. How much, if any, interest can Henry deduct if he files single with AGI of $72,500?

An individual who is eligible to be claimed as a dependent on another's return and has$1,000 of earned income may claim a standard deduction of $1,350.

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 joint with two personal exemptions. Calculate their taxable income.

Which of the following is a true statement?

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

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?

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because:

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York78t)his year. During the trip Fred incurred the following unreimbursed expenses: What is the amount of Fred's deduction before the application of any AGI limitations?

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Max deduct as a qualifying education expense if he files single andreports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 6: Individual Deductions

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

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

Last year Henry borrowed $15,000 to help pay for his dependent daughter's college tuition. This year Henry paid $2,800 of interest on the loan. How much, if any, interest can Henry deduct if he files single with AGI of $72,500?

An individual who is eligible to be claimed as a dependent on another's return and has$1,000 of earned income may claim a standard deduction of $1,350.

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 joint with two personal exemptions. Calculate their taxable income.

Which of the following is a true statement?

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

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?

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because:

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York78t)his year. During the trip Fred incurred the following unreimbursed expenses: What is the amount of Fred's deduction before the application of any AGI limitations?

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Max deduct as a qualifying education expense if he files single andreports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters