Question 1

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance from the taxpayer's old residence to the taxpayer's new residence.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a true statement?

Accepted Answer

A)  For purposes of the deduction for educational interest, an educational loan must be used to pay tuition to any type of school. 
B)  The maximum deduction for educational interest is $5,000 for married taxpayers filing jointly. 
C)  Self-employed taxpayers are not allowed to deduct health care premiums if the taxpayer is eligible to participate in their spouse's employer-provided health plan. 
D)  Self-employment taxes paid by self-employed taxpayers are deductible as business expenses. 
E)  All of the choices are true. 
A)  For purposes of the deduction for educational interest, an educational loan must be used to pay tuition to any type of school. 
B)  The maximum deduction for educational interest is $5,000 for married taxpayers filing jointly. 
C)  Self-employed taxpayers are not allowed to deduct health care premiums if the taxpayer is eligible to participate in their spouse's employer-provided health plan. 
D)  Self-employment taxes paid by self-employed taxpayers are deductible as business expenses. 
E)  All of the choices are true.

Question 3

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)  Taxpayers are not allowed to receive a moving allowance from their employers. 
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)  Taxpayers are not allowed to receive a moving allowance from their employers. 
E)  All of the choices are false.

Question 4

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

Accepted Answer

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

Question 5

This fall Marsha and Jeff paid $5,000 for their son Josh's tuition and fees at State University (a qualified education institution).They also paid $1,000 for Josh's books.How much of these two payments can Marsha and Jeff deduct this year,assuming Josh is their dependent and their modified AGI is $135,000? (Assume the 2016 rules apply for purposes of the qualified education expense deduction.)

Accepted Answer

A)  Marsha and Jeff can deduct $5,000 for AGI. 
B)  Marsha and Jeff can deduct $4,000 for AGI. 
C)  Marsha and Jeff can deduct $2,500 for AGI. 
D)  Marsha and Jeff can deduct $2,000 for AGI. 
E)  None - the tuition is not deductible. 
A)  Marsha and Jeff can deduct $5,000 for AGI. 
B)  Marsha and Jeff can deduct $4,000 for AGI. 
C)  Marsha and Jeff can deduct $2,500 for AGI. 
D)  Marsha and Jeff can deduct $2,000 for AGI. 
E)  None - the tuition is not deductible.

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following costs are deductible as an itemized medical expense?

Accepted Answer

A)  The cost of prescription medicine and over-the-counter drugs. 
B)  Medical expenses incurred to prevent disease. 
C)  The cost of elective cosmetic surgery. 
D)  Medical expenses reimbursed by health insurance. 
E)  None of the costs are deductible. 
A)  The cost of prescription medicine and over-the-counter drugs. 
B)  Medical expenses incurred to prevent disease. 
C)  The cost of elective cosmetic surgery. 
D)  Medical expenses reimbursed by health insurance. 
E)  None of the costs are deductible.

Question 9

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

Question 10

Homer is an executive who is paid a salary of $80,000.Homer also paints landscapes as a hobby.This year Homer expects to sell paintings for a total of $750 and incur the following expenses associated with his painting activities:
 Travel                                        $$1,480$
Paints ard carvas                          610
Pairting classes                              230
 What is the effect of Homer's hobby on his taxable income? Assume his AGI does not reflect his painting activities and that he itemizes deductions but has no other miscellaneous itemized deductions.

Accepted Answer

Homer's hobby will increase his taxable

Question 11

Madeoff donated stock (capital gain property)to a public charity.He purchased the stock 3 years ago for $100,000,and on the date of the gift,it had a fair market value of $200,000.What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000 (before considering the itemized deduction phase-out)?

Accepted Answer

A)  $100,000. 
B)  $200,000. 
C)  $150,000. 
D)  $250,000. 
E)  None of the choices are correct. 
A)  $100,000. 
B)  $200,000. 
C)  $150,000. 
D)  $250,000. 
E)  None of the choices are correct.

Question 12

This year Norma paid $1,200 of real estate taxes on her personal residence.Norma's other itemized deductions (state income taxes)only amount to $3,100.Which of the following is a true statement if Norma files single with one personal exemption?

Accepted Answer

A)  Norma can deduct 4,300 for AGI. 
B)  Norma should deduct $1,200 even if her standard deduction is $6,350. 
C)  Norma should deduct $4,300 even if her standard deduction is $6,350. 
D)  Norma should deduct $3,100 even if her standard deduction is $6,350. 
E)  Norma should claim the standard deduction. 
A)  Norma can deduct 4,300 for AGI. 
B)  Norma should deduct $1,200 even if her standard deduction is $6,350. 
C)  Norma should deduct $4,300 even if her standard deduction is $6,350. 
D)  Norma should deduct $3,100 even if her standard deduction is $6,350. 
E)  Norma should claim the standard deduction.

Question 13

Simone donated a landscape painting (tangible capital gain property)to a library,a public charity.She purchased the painting five years ago for $50,000,and on the date of the gift,it had a fair market value of $200,000.What is her maximum charitable contribution deduction for the year if her AGI is $300,000 (before considering the itemized deduction phase-out)?

Accepted Answer

A)  $100,000. 
B)  $200,000. 
C)  $90,000 if the library uses the painting in its charitable purpose. 
D)  $150,000. 
E)  None of the choices are correct. 
A)  $100,000. 
B)  $200,000. 
C)  $90,000 if the library uses the painting in its charitable purpose. 
D)  $150,000. 
E)  None of the choices are correct.

Question 14

Justin and Georgia file married jointly with one dependent.This year,their AGI is $327,800.What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Accepted Answer

The answer of Justin and Georgia file married jointly with...

Question 15

Which of the following is a true statement?

Accepted Answer

A)  All business expenses are deducted for AGI. 
B)  Investment expenses are typically deducted for AGI. 
C)  Tax preparation fees are deducted for AGI. 
D)  Rental and royalty expenses are deducted for AGI. 
E)  All of the choices are true. 
A)  All business expenses are deducted for AGI. 
B)  Investment expenses are typically deducted for AGI. 
C)  Tax preparation fees are deducted for AGI. 
D)  Rental and royalty expenses are deducted for AGI. 
E)  All of the choices are true.

Question 16

This year,Jong paid $3,000 of interest on a qualified education loan.Jong files married filing joint and reports modified AGI of $147,000.  What is Jong's deduction for interest expense on an educational loan?

Accepted Answer

A)  $2,500. 
B)  $3,000. 
C)  $1,500. 
D)  $1,000. 
E)  None of the choices are correct. 
A)  $2,500. 
B)  $3,000. 
C)  $1,500. 
D)  $1,000. 
E)  None of the choices are correct.

Question 17

Bryan is 62 years old and lives alone.This year he has received $25,000 in taxable interest and pension payments,and he has paid the following expenses:
 Real estate taxes                                                                                      $\$ 1,640$
Medical expenses $\$ 2,000$ was reirrbursed by insurance)                    3,650
Charitable contributions (cash to the Urity church)                                  460 If Bryan files single with one personal exemption,calculate his taxable income.

Accepted Answer

$13,050 = $25,000 − $7,900 − $4,050
Brya

Question 18

Casey currently commutes 35 miles to work in the city.He is considering a new assignment 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)  Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles. 
B)  If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence. 
C)  To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles. 
D)  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. 
E)  All of the choices are false. 
A)  Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles. 
B)  If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence. 
C)  To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles. 
D)  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. 
E)  All of the choices are false.

Question 19

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 and reports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

Accepted Answer

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

Question 20

This year,Benjamin Hassell paid $20,000 of interest on a mortgage on his home (Benjamin borrowed $600,000 to buy the residence and it is currently worth $1,000,000),$12,000 on a $150,000 home equity loan on his home,and $10,000 of interest on a mortgage on his vacation home (loan of $300,000; home purchased for $400,000).How much interest expense can Benjamin deduct as an itemized deduction?

Accepted Answer

$38,000.
Benjamin's acquisition debt on

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance from the taxpayer's old residence to the taxpayer's new residence.

Which of the following is a true statement?

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:

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?

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

Which of the following costs are deductible as an itemized medical expense?

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?

This year Norma paid $1,200 of real estate taxes on her personal residence.Norma's other itemized deductions (state income taxes)only amount to $3,100.Which of the following is a true statement if Norma files single with one personal exemption?

Justin and Georgia file married jointly with one dependent.This year,their AGI is $327,800.What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Which of the following is a true statement?

This year,Jong paid $3,000 of interest on a qualified education loan.Jong files married filing joint and reports modified AGI of $147,000. What is Jong's deduction for interest expense on an educational loan?

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 and reports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

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

Filters

Exam 6: Individual Deductions

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance from the taxpayer's old residence to the taxpayer's new residence.

Which of the following is a true statement?

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:

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?

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

Which of the following costs are deductible as an itemized medical expense?

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?

This year Norma paid $1,200 of real estate taxes on her personal residence.Norma's other itemized deductions (state income taxes)only amount to $3,100.Which of the following is a true statement if Norma files single with one personal exemption?

Justin and Georgia file married jointly with one dependent.This year,their AGI is $327,800.What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Which of the following is a true statement?

This year,Jong paid $3,000 of interest on a qualified education loan.Jong files married filing joint and reports modified AGI of $147,000. What is Jong's deduction for interest expense on an educational loan?

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 and reports modified AGI of $60,000 (assume the 2016 rules apply for purposes of the qualified education expense deduction)?

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

Filters