Exam 5: Deductions for and From AGI

Over the years, Monica contributed $15,000 to a Roth IRA opened 10 years ago. The IRA has a current value of $37,500. She is 54 years old and takes a distribution of $25,000. How much of the distribution will be taxable to Monica?

Christine is a self-employed graphics artist who has net earned income of $160,000 from her business. Christine has a defined contribution SEP Plan and plans to contribute the amount that provides the maximum deduction allowable. How much can Christine contribute?

Meade paid $5,000 of state income taxes in 2019. The total actual sales taxes paid during 2019 was $4,500, which did not include $3,000 for the sales taxes paid in 2019 on Meade's new boat. How should Meade treat the taxes paid in his 2019 tax return?

During the current year, Mary paid the following expenses: ? Prescription drugs \ 490 Aspirin and over the counter cold capsules \ 130 Hospital and doctors \ 700 Life insurance \ 260 What is the total amount of medical expenses (before considering the limitation based on adjusted gross income) that would enter into the calculation of itemized deductions on Mary's current year income tax return?

Frank was so entertained by the Paris Symphony on his visit to France that he mailed them a donation of $100 to support their organization as soon as he returned home to Seattle. Frank may deduct the charitable contribution to the Paris Symphony on his US tax return.

Taxpayers are permitted an itemized deduction for the lesser of state income taxes paid or state sales taxes paid.

Which of the following is not an exception to the 10% early withdrawal penalty of a traditional IRA:

Taxpayers must itemize their deductions to be allowed a charitable contribution deduction.

Which of the following is not deductible as an itemized deduction?

Charu is charged $70 by the state she lives in related to vehicle registration based on the weight of her personal auto. Charu can deduct the $70 as an itemized deduction.