Question 1

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 2

Which of the following is a true statement?

Accepted Answer

A) Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax 
B) To deduct expenses associated with any profit-motivated activity, taxpayers must maintain a high level of involvement or effort in the activity throughout the year 
C) Business activities never require a relatively high level of involvement or effort from the taxpayer 
D) All business expenses are deducted for AGI 
E) All of these choices are correct. 
A) Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax 
B) To deduct expenses associated with any profit-motivated activity, taxpayers must maintain a high level of involvement or effort in the activity throughout the year 
C) Business activities never require a relatively high level of involvement or effort from the taxpayer 
D) All business expenses are deducted for AGI 
E) All of these choices are correct.

Question 3

Misti purchased a residence this year. Misti, age 32, is a single parent and lives with her 1-year-old daughter. In 2020, Misti received a salary of $160,000 and made the following payments:
   Misti files as a head of household. Calculate her taxable income this year.

Accepted Answer

$141,350 = $160,000 − $18,650.
Misti's i

Question 4

In 2020, the deduction to individual taxpayers for charitable contributions paid in cash to public charities is limited to 10 percent of the taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 5

Bunching itemized deductions is one form of tax evasion.

Accepted Answer

A) True 
 B)False

Question 6

Campbell, a single taxpayer, has $400,000 of profits (net of the deduction for self-employment taxes, the self-employed health insurance deduction, and the deduction for contributions to qualified self-employment retirement plans)from her general store, which she operates as a sole proprietorship. She has no employees, $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?

Accepted Answer

A) $100,000 
B) $80,000 
C) $20,000 
D) $1,000 
E) $0 
A) $100,000 
B) $80,000 
C) $20,000 
D) $1,000 
E) $0

Question 7

Excess business losses are carried back and then forward.

Accepted Answer

A) True 
 B)False

Question 8

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property. Determine Alexandra's AGI for 2020.

Accepted Answer

${{[a(10)]:#,###}}.
All of the

Question 9

This year Tiffanie files as a single taxpayer. Tiffanie received $71,900 of salary and paid $3,125 of qualified educational interest. This year Tiffanie paid moving expenses of $6,400 and received $9,100 of alimony (from her ex-husband, whom she divorced in 2012). What is Tiffanie's AGI?

Accepted Answer

${{[a(5)]:#,###}} (${{[a(1)]:#,###}} + $

Question 10

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2020? Use Exhibit 6-12. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

Accepted Answer

A) $12,400 
B) $14,050 
C) $18,650 
D) $19,950 
E) $20,300 
A) $12,400 
B) $14,050 
C) $18,650 
D) $19,950 
E) $20,300

Question 11

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?

Accepted Answer

A) $270,000 
B) $259,000 
C) $11,000 
D) $0 
E) None of the choices are correct. 
A) $270,000 
B) $259,000 
C) $11,000 
D) $0 
E) None of the choices are correct.

Question 12

Carly donated inventory (ordinary income property)to a church. She purchased the inventory last month for $100,000, and on the date of the gift, it had a fair market value of $92,000. What is her maximum charitable contribution deduction for the year related to this inventory if her AGI is $200,000?

Accepted Answer

A) $100,000 
B) $92,000 
C) $60,000 
D) $46,000 if the church sells the inventory 
E) None of the choices are correct. 
A) $100,000 
B) $92,000 
C) $60,000 
D) $46,000 if the church sells the inventory 
E) None of the choices are correct.

Question 13

This year, Benjamin Hassell paid $17,250 of interest on a mortgage on his home (Benjamin borrowed $575,000 in 2015 to buy the residence and it is currently worth $920,000), $13,600 on a $170,000 home-equity loan on his home, and $11,400 of interest on a mortgage on his vacation home (loan of $380,000; home purchased for $480,000 in 2016; home is not rented out at any time). How much interest expense can Benjamin deduct as an itemized deduction?

Accepted Answer

${{[a(10)]:#,###}}.
Benjamin's acquisiti

Question 14

Hector is a married, self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums (not through an exchange). Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

Accepted Answer

A) Hector chose not to participate in the employer-sponsored plan of his spouse 
B) Hector's spouse participates in an employer-sponsored plan, but Hector is not eligible to participate in this plan 
C) Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan 
D) Hector can deduct the health insurance premiums regardless of the insurance status of his spouse 
E) None of the choices - health insurance premiums can only be deducted as an itemized deduction. 
A) Hector chose not to participate in the employer-sponsored plan of his spouse 
B) Hector's spouse participates in an employer-sponsored plan, but Hector is not eligible to participate in this plan 
C) Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan 
D) Hector can deduct the health insurance premiums regardless of the insurance status of his spouse 
E) None of the choices - health insurance premiums can only be deducted as an itemized deduction.

Question 15

This year Riley files single and reports modified AGI of $76,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Accepted Answer

A) The deduction for qualifying education interest is $1,200 
B) The deduction for qualifying education interest is $1,000 
C) The deduction for qualifying education interest is $720 
D) The deduction for qualifying education interest is $200 
E) None of the choices are correct. 
A) The deduction for qualifying education interest is $1,200 
B) The deduction for qualifying education interest is $1,000 
C) The deduction for qualifying education interest is $720 
D) The deduction for qualifying education interest is $200 
E) None of the choices are correct.

Question 16

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is deductible as an other itemized deduction?

Accepted Answer

A) Gambling losses to the extent of gambling winnings 
B) Fees for investment advice 
C) Employee business expenses 
D) Tax preparation fees 
E) All of these choices are correct. 
A) Gambling losses to the extent of gambling winnings 
B) Fees for investment advice 
C) Employee business expenses 
D) Tax preparation fees 
E) All of these choices are correct.

Question 18

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 19

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 jointly. Calculate their taxable income.

Accepted Answer

$82,600 = $110,000 − ($16,640 mortgage i

Question 20

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship in 2020. How much of this loss is deductible after considering the excess business loss rules?

Accepted Answer

A) $270,000 
B) $259,000 
C) $11,000 
D) $0 
E) None of the choices are correct. 
A) $270,000 
B) $259,000 
C) $11,000 
D) $0 
E) None of the choices are correct.

Exam 6: Individual Deductions

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.

Which of the following is a true statement?

Misti purchased a residence this year. Misti, age 32, is a single parent and lives with her 1-year-old daughter. In 2020, Misti received a salary of $160,000 and made the following payments: Misti files as a head of household. Calculate her taxable income this year.

In 2020, the deduction to individual taxpayers for charitable contributions paid in cash to public charities is limited to 10 percent of the taxpayer's AGI.

Bunching itemized deductions is one form of tax evasion.

Excess business losses are carried back and then forward.

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property. Determine Alexandra's AGI for 2020.

This year Tiffanie files as a single taxpayer. Tiffanie received $71,900 of salary and paid $3,125 of qualified educational interest. This year Tiffanie paid moving expenses of $6,400 and received $9,100 of alimony (from her ex-husband, whom she divorced in 2012). What is Tiffanie's AGI?

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2020? Use Exhibit 6-12. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

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?

Hector is a married, self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums (not through an exchange). Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

This year Riley files single and reports modified AGI of $76,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Which of the following is deductible as an other itemized deduction?

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

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 jointly. Calculate their taxable income.

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship in 2020. How much of this loss is deductible after considering the excess business loss rules?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, 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