Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  The cost of eyeglasses. 
B)  Payments to a hospital. 
C)  Transportation for medical purposes. 
D)  The cost of insurance for long-term care services. 
E)  All of the choices are deductible as medical expenses. 
A)  The cost of eyeglasses. 
B)  Payments to a hospital. 
C)  Transportation for medical purposes. 
D)  The cost of insurance for long-term care services. 
E)  All of the choices are deductible as medical expenses.

Question 3

Campbell, a single taxpayer, has $95,000 of profits from her general store that she operates as a sole proprietorship. She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income?

Accepted Answer

A)  $95,000. 
B)  $19,000. 
C)  $10,000. 
D)  $8,000. 
E)  $0. 
A)  $95,000. 
B)  $19,000. 
C)  $10,000. 
D)  $8,000. 
E)  $0.

Question 4

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. What is the amount of their standard deduction this year?

Accepted Answer

$26,600
The married joint stan

Question 5

Rachel is an engineer who practices as a sole proprietor. This year, Rachel had net business income of $500,000 from her business. Assume that Rachel pays $20,000 wages to her employees, she has $500,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $380,000. Calculate Rachel's deduction for qualified business income.

Accepted Answer

$17,500
Engineering is a qualified trade

Question 6

Which of the following is a True statement?

Accepted Answer

A)  A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B)  A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C)  A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D)  Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E)  All of the choices are True. 
A)  A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B)  A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C)  A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D)  Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E)  All of the choices are True.

Question 7

Which of the following is a True statement?

Accepted Answer

A)  The deduction for interest on educational loans is subject to a phase-out limitation. 
B)  The deduction for moving expenses is subject to a phase-out limitation. 
C)  Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan. 
D)  Excess business losses are deductible up to $100,000. 
E)  All of the choices are False. 
A)  The deduction for interest on educational loans is subject to a phase-out limitation. 
B)  The deduction for moving expenses is subject to a phase-out limitation. 
C)  Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan. 
D)  Excess business losses are deductible up to $100,000. 
E)  All of the choices are False.

Question 8

Which of the following is a True statement?

Accepted Answer

A)  The deduction of cash contributions to public charities is limited to 30 percent of AGI. 
B)  The deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI. 
C)  The deduction of capital gain property to public charities is limited to 20 percent of AGI. 
D)  The deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI. 
E)  None of the choices are True. 
A)  The deduction of cash contributions to public charities is limited to 30 percent of AGI. 
B)  The deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI. 
C)  The deduction of capital gain property to public charities is limited to 20 percent of AGI. 
D)  The deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI. 
E)  None of the choices are True.

Question 9

This year Latrell made the following charitable contributions:
   
Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year. You may assume that the stock and painting has been owned for 10 years.

Accepted Answer

The charitable deduction is $40,500 over

Question 10

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 taxable income if he files single.

Accepted Answer

$68,500
$68,500 = ($75,000 salary + $12,

Question 11

All investment expenses are itemized deductions.

Accepted Answer

A) True 
 B)False

Question 12

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

Accepted Answer

A) True 
 B)False

Question 13

Claire donated 200 publicly-traded shares of stock (held for 5 years) to her father's nonoperating private foundation this year. The stock was worth $15,000 but Claire's basis was only $4,000. Determine the maximum amount of charitable deduction for the donation if Claire's AGI is $60,000 this year.

Accepted Answer

$12,000
The stock is long-term capital g

Question 14

Which of the following is a True statement?

Accepted Answer

A)  For purposes of the deduction for educational interest, expenses do not include expenses for room, board and travel. 
B)  For purposes of the deduction for educational interest, qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent. 
C)  The maximum deduction for interest expense on qualified education loans is $6,000. 
D)  A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible from AGI as an investment expense. 
E)  All of the choices are False. 
A)  For purposes of the deduction for educational interest, expenses do not include expenses for room, board and travel. 
B)  For purposes of the deduction for educational interest, qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent. 
C)  The maximum deduction for interest expense on qualified education loans is $6,000. 
D)  A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible from AGI as an investment expense. 
E)  All of the choices are False.

Question 15

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Accepted Answer

A) True 
 B)False

Question 16

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

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

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

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. What is the amount of their standard deduction this year?

Which of the following is a True statement?

Which of the following is a True statement?

Which of the following is a True statement?

All investment expenses are itemized deductions.

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

Claire donated 200 publicly-traded shares of stock (held for 5 years) to her father's nonoperating private foundation this year. The stock was worth $15,000 but Claire's basis was only $4,000. Determine the maximum amount of charitable deduction for the donation if Claire's AGI is $60,000 this year.

Which of the following is a True statement?

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

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

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

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

Filters

Exam 6: Individual Deductions

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

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

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. What is the amount of their standard deduction this year?

Which of the following is a True statement?

Which of the following is a True statement?

Which of the following is a True statement?

All investment expenses are itemized deductions.

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

Which of the following is a True statement?

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

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

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

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

Filters