Exam 6: Individual Deductions

Scott is a self-employed plumber and his wife,Emily,is a full-time employee for the University.Emily has health insurance from a qualified plan provided by the University,but Scott has chosen to purchase his own health insurance rather than participate in Emily's plan.Besides paying $5,400 for his health insurance premiums,Scott also pays the following expenses associated with his plumbing business: Plurrbing tools and supplies                 $\$ 1,300$ Rent on Scott'spluribirg shop                  $6,250$ Trariportation between Scott's shop and yarious job sites              $500$ Plumber s wiforr                                                                        $50$ Plumbirg tuck rental                                                              $7,200$ Self ermloymert tax (1/2 is employer share)                           $400$ 7,200 400 What is the amount of deductions for AGI that Scott can claim this year (2017)?

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.

The profit motive distinguishes "business" activities from "personal" activities.

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.

Ned is a head of household with a dependent son,Todd,who is a full-time student.This year Ned made the following expenditures related to Todd's support: What amount can Ned include in his itemized deductions?

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?

Bruce is employed as an executive and his wife,Marie,is a self-employed realtor.Besides Bruce's salary,Bruce and Marie own a warehouse that they rent to a local business for storage.This year they paid $1,250 for electric service in the warehouse.Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay.Marie paid $45 fee to rent a safe deposit box to store records associated with her realty operation.Which of the following is a true statement?

Which of the following is a true statement?

Andres and Lakeisha are married and file joint.Andres is 72 years old and in good health.Lakeisha is 62 years old and blind.What amount of standard deduction can Andres and Lakeisha claim in 2017?

Jenna (age 50)files single and reports AGI of $40,000.This year she has incurred the following medical expenses: Dentist charges                                                                    $90 Physiciari's fees                                                                $2,800$ Cosmetic surgery                                                                    $400$ Cost of eyeglasse.                                                                  $250$ Hospital charges                                                                $1,330$ Over-the-courter drigs                                                        $240$ $\text { Over-the-counter drugs }$                                                   $75$ Medical insurance premiurns (not through an excharge)              $1,200$ Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.

Grace is employed as the manager of a sandwich shop.This year she earned a salary of $45,000 and incurred the following expenses associated with her employment: Bubscriptions to food publications                            $\$ 300$ Cooking class ("How to make better subs")                $250$ Trarsportation between Grace'shorne and the shop        $500$ What amount of miscellaneous itemized deductions can Grace claim on Schedule A if these are her only miscellaneous itemized deductions?

Which of the following is a true statement?

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Unreimbursed employee business expenses,investment expenses,hobby expenses,and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Which of the following is a true statement?

Which of the following is a true statement?

This year Kelly bought a new auto for $20,000 plus $1,650 in state and local sales taxes.Besides this sales tax,Kelly also paid $8,260 in state income taxes and had other itemized deductions (e.g.,mortgage interest)of $3,500.If Kelly files single with AGI of $56,000,what amount of itemized deductions will she be eligible to claim?

Which of the following taxes will not qualify as an itemized deduction?

Lewis is an unmarried law student at State University,a qualified educational institution.Last year Lewis borrowed $30,000 and used the proceeds to pay his university tuition.This year Lewis paid $1,500 of interest on the loan.Which of the following is a true statement if Lewis reports $40,000 of salary and no other items of income or expense?

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.