Question 1

State sales taxes can be deducted in lieu of state income taxes.

Accepted Answer

A) True 
 B)False

Question 2

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

Accepted Answer

Money contributed to a traditional IRA i

Question 3

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Accepted Answer

A) True 
 B)False

Question 4

Miki, who is single and 57 years old, has a qualifying high-deductible insurance plan. She had the following transactions with her HSA during the year:
? $$\begin{array} { l r } 
\text { Contributions to her HSA } & \$ 3,700 \
\text { Interest income earned on her HSA } & 9,739 \
\text { Medical expenses paid from her HSA } & 7,650
\end{array}$$ 
a. How much may Miki claim as a deduction for adjusted gross income?
b. What is the amount that Miki must report on her federal income tax return as income from her HSA?
c. How much is subject to a penalty? What is the penalty percentage?
?

Accepted Answer

a. $3,700. The limit including a catch-u

Question 5

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 6

Amy paid the following interest expense during the current year: $\begin{array}{ll}
\text { Qualified home mortgage interest } & \$ 5,000 \
\text { Credit card interest } & \$ 1,000 \
\text { Personal bank loan interest } & \$ 3,000
\end{array}$
 What is the amount of Amy's interest deduction for the current year?

Accepted Answer

A) $8,000 
B) $3,000 
C) $4,000 
D) $5,000 
E) $6,000 
A) $8,000 
B) $3,000 
C) $4,000 
D) $5,000 
E) $6,000

Question 7

Gail is a single elementary school teacher. She buys the following items for use in her classroom in 2019: $\begin{array}{llcc}
  \text {Construction paper and tissues  } &\$45\
 \text {Materials for decorating the classroom bulletin boards  } &\$200\
 \text {  Artist's smock used for in-class finger painting} &\$30\
 \text { 12 Dozen erasers } &\$15\
\end{array}$
 What amount can Gail deduct either as a for or from AGI deduction in 2019?

Accepted Answer

A) $250 as a for AGI deduction and $30 as a from AGI deduction (subject to 2% of AGI) 
B) $250 as a for AGI deduction and $0 as a from AGI deduction 
C) $290 as a for AGI deduction and $0 as a from AGI deduction 
D) $250 as a for AGI deduction and $40 as a from AGI deduction 
A) $250 as a for AGI deduction and $30 as a from AGI deduction (subject to 2% of AGI) 
B) $250 as a for AGI deduction and $0 as a from AGI deduction 
C) $290 as a for AGI deduction and $0 as a from AGI deduction 
D) $250 as a for AGI deduction and $40 as a from AGI deduction

Question 8

Jeremy, age 38, has $25,000 in a traditional IRA account and is considering taking the money out to buy himself a new car. What will be the tax consequences to Jeremy if he withdraws the $25,000 from his IRA in 2019 for this purpose? Explain.

Accepted Answer

Since Jeremy is under age 59½, withdrawa

Question 9

Mike and Rose are married and file jointly. Mike earns $45,000 from wages and Rose reports $450 on her Schedule C as an artist. Since Mike's work does not offer health insurance, Rose pays the following health insurance premiums from her business account: $$\begin{array} { l r } 
\text { Family heal th insurance } & \$ 9,500 \
\text { Family dental insurance } & 1,000
\end{array}$$ How much can Mike and Rose deduct as self-employed health insurance?

Accepted Answer

$450. The deduction for self-e

Question 10

Don donates his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Accepted Answer

Don is allowed to deduct the amount the

Question 11

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

Accepted Answer

A) True 
 B)False

Question 12

Melvin owns his home and has a $200,000 mortgage related to his purchase of the residence. In the fall of the current year, he borrows $40,000 on credit cards for college costs for his two sons. The interest expense on the mortgage is $15,000 and the interest expense on the credit cards is $6,000. How much of the interest is deductible as an itemized deduction and why?

Accepted Answer

Melvin's total interest deduction on Sch

Question 13

During 2019, Ruth, a nurse at Dr. Pan's office, incurred the following expenses: $$\begin{array} { l r } 
\text { Brokerage account custodial fee } & \$ 40 \
\text { Professional subscriptions to nursing magazines } & \$ 110 \
\text { Tax return preparation fee } & \$ 240 \
\text { Tax advice related to a prior year tax return IRS audit } & \$ 310 \
\text { Nursing uniform expenses } & \$ 200
\end{array}$$ If Ruth's adjusted gross income is $29,000, calculate her net miscellaneous deductions after the adjusted gross income percentage limitation.

Accepted Answer

$0. Miscellaneous expenses sub

Question 14

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $6,000 to an IRA, subject to the earned income limitation.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not deductible as interest expense on Schedule A?

Accepted Answer

A) Loan fee charged for appraisal service 
B) Home mortgage interest 
C) Mortgage interest on a second residence 
D) Home mortgage prepayment penalties 
E) All of the above are deductible as interest expense 
A) Loan fee charged for appraisal service 
B) Home mortgage interest 
C) Mortgage interest on a second residence 
D) Home mortgage prepayment penalties 
E) All of the above are deductible as interest expense

Question 16

Which of the following is not an itemized deduction?

Accepted Answer

A) Medical expenses 
B) IRA contribution deduction 
C) Personal property taxes 
D) Home mortgage interest 
E) All of these are itemized deductions 
A) Medical expenses 
B) IRA contribution deduction 
C) Personal property taxes 
D) Home mortgage interest 
E) All of these are itemized deductions

Question 17

Which of the following professions is not eligible for a for AGI deduction related to certain unreimbursed business expenses:

Accepted Answer

A) K-12 educators 
B) Performing artist 
C) National guard or reservist 
D) Supreme Court justice 
E) All of these 
A) K-12 educators 
B) Performing artist 
C) National guard or reservist 
D) Supreme Court justice 
E) All of these

Question 18

If a taxpayer contributes a painting to a museum but reserves the right to use the painting for parties, he may not be allowed a deduction for the charitable contribution.

Accepted Answer

A) True 
 B)False

Question 19

Jody is a physician (not covered by a retirement plan) with a salary of $40,000 from the hospital where she is employed. She supports her husband, Andre, who sells art work and has no earned income. Both are in their twenties. What is the maximum total amount that Jody and Andre may contribute to their IRAs and deduct for the 2019 tax year?

Accepted Answer

A) $5,500 
B) $6,000 
C) $12,000 
D) $11,000 
E) None of these 
A) $5,500 
B) $6,000 
C) $12,000 
D) $11,000 
E) None of these

Question 20

Ellen supports her family as a self-employed attorney. She reports $90,000 of income on her Schedule C and pays $8,000 for health insurance for her family, $2,500 for dental insurance, $4,000 for health insurance for her 23-year-old daughter who is no longer a dependent, and $3,000 for disability insurance for herself. What is Ellen's self-employed health insurance deduction?

Accepted Answer

A) $8,000 
B) $10,500 
C) $12,000 
D) $14,500 
E) $13,500 
A) $8,000 
B) $10,500 
C) $12,000 
D) $14,500 
E) $13,500

State sales taxes can be deducted in lieu of state income taxes.

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

Amy paid the following interest expense during the current year: Qualified home mortgage interest \ 5,000 Credit card interest \ 1,000 Personal bank loan interest \ 3,000 What is the amount of Amy's interest deduction for the current year?

Jeremy, age 38, has $25,000 in a traditional IRA account and is considering taking the money out to buy himself a new car. What will be the tax consequences to Jeremy if he withdraws the $25,000 from his IRA in 2019 for this purpose? Explain.

Don donates his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $6,000 to an IRA, subject to the earned income limitation.

Which of the following is not deductible as interest expense on Schedule A?

Which of the following is not an itemized deduction?

Which of the following professions is not eligible for a for AGI deduction related to certain unreimbursed business expenses:

If a taxpayer contributes a painting to a museum but reserves the right to use the painting for parties, he may not be allowed a deduction for the charitable contribution.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Accounting Periods and Other Taxes

Tax Credits

Depreciation and Sale of Business Property

Payroll, Estimated Payments and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 5: Deductions for and From AGI

State sales taxes can be deducted in lieu of state income taxes.

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

If real property is sold during the year, the property taxes must be allocated between the buyer and seller based on the number of days the property was held by each party.

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

Amy paid the following interest expense during the current year: Qualified home mortgage interest \ 5,000 Credit card interest \ 1,000 Personal bank loan interest \ 3,000 What is the amount of Amy's interest deduction for the current year?

Jeremy, age 38, has $25,000 in a traditional IRA account and is considering taking the money out to buy himself a new car. What will be the tax consequences to Jeremy if he withdraws the $25,000 from his IRA in 2019 for this purpose? Explain.

Don donates his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $6,000 to an IRA, subject to the earned income limitation.

Which of the following is not deductible as interest expense on Schedule A?

Which of the following is not an itemized deduction?

Which of the following professions is not eligible for a for AGI deduction related to certain unreimbursed business expenses:

If a taxpayer contributes a painting to a museum but reserves the right to use the painting for parties, he may not be allowed a deduction for the charitable contribution.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Accounting Periods and Other Taxes

Tax Credits

Depreciation and Sale of Business Property

Payroll, Estimated Payments and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters