Jenna (age 50) files single and reports AGI of $40,000. This year she has incurred the following medical expenses: $\begin{array}{l} \begin{array}{lll} \text { Dentist charges}\\ \text { Physician's fees}\\ \text { Cosmetic surgery}\\ \text { Cost of eyeglasses}\\ \text { Hospital charges}\\ \text { Prescription drugs}\\ \text { Over-the-counter drugs}\\ \text { Medical insurance premiums}\\ \end{array} \begin{array}{lll} 90\\ 2,800 \\ 400 \\ 250 \\ 1, 330 \\ 240 \\ 75 \\ 1,200 \end{array} \end{array}$ Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.

$2,910 All expenses are qualified medica

Exam 17: Individual From Agi Deductions

This year Darcy made the following charitable contributions: Donee Property Cost FMV State University IBM stock \ 15,000 \ 10,50 Salvation Army Clothes 2,500 500 State Art Museum Painting 5,000 45,000 City Hospital Cash 8,000 Determine the maximum amount of charitable deduction for Darcy's contribution of the painting if her AGI is $80,000 this year. You may assume that both the stock and painting have been owned for 10 years and the painting is used in the State Art Museum's charitable purpose.

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Question 1

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The charitable deduction is $21,000 for the painting and $40,000 overall
$\begin{array}{l}\begin{array}{lll}&\text { Description }\$1) &\mathrm{AGI}\\(2) &\text { 60 \% contributions}\\(3)& \text { 60\% AGI contribution limit}\\(4)& \text { Allowable 60\% deductions}\\(5) & \text { 50 \% contributions}\\(6) & \text { 50 \% AGI contribution limit}\\(7) & \text { Allowable 50 \% deductions}\\(8) & \text { 20 \% contributions}\\(9) & \text { 20 \% AGI contribution limit}\\(10) & \text { Remaining 50 \% AGI contribution limit}\\(11) & \text { Allowable \( 30 \% $ deductions}\\\\& \text { Deductible charitable contributions}\\\end{array}\begin{array}{lll} \text { Amount}& \text { Explanation}\\\$ 80,000 & \\8,000& \text { Cash contribution } \\\underline {48,000 }& (1) \times 60 \% \\8,000& \text { Lesser of }(2) \text { or }(3) \\11,000 & \text { IBM stock and clothes } \\32,000 & {[(1) \times 50 \%]-(4)} \\11,000 & \text { Least of }(5) \text { or }(6) \\45,000 & \text { painting } \\\underline {24,000 }& (1) \times 30 \% \\21,000 & (6)-(7) \\21,000 & \text { Least of }(8),(9), \text { or } \\---& \text { (10) } \\ 40,000 & (4)+(7)+(11)\end{array}\end{array}$
The stock and clothes are not subject to the 30 percent AGI limit because these are ordinary income properties (basis exceeds its value so neither is capital gain property). The painting is long-term tangible personal property apparently related to the purpose of the charity. The deduction this year is $40,000 consisting of cash of $8,000, IBM stock of $10,500, clothes of $500, and the painting of $21,000. The remaining value of the painting $24,000 ($45,000 − $21,000) is carried over to next year subject to the 30 percent of AGI limit.

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?

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Question 2

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C

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: State income taxes withheld Employee business expenses (unreimbursed portion) Charitable cash contributions Investment counseling fees Tax preparation fee \ 6,300 1,450 200 780 310 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 2018 taxable income if he files single.

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Question 3

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$68,500
$68,500 = ($75,000 salary + $12,000 gambling winnings) - ($6,300 state taxes + $12,000 gambling losses + $200 charitable contributions). The employee expenses, investment fees, and tax preparation fee are nondeductible.
The gambling losses (up to gambling winnings) are a miscellaneous itemized deduction, and the state income taxes and charitable contributions are also itemized deductions.

Which of the following is a true statement?

(Multiple Choice)

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Question 4

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)?

(Multiple Choice)

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Question 5

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

(Multiple Choice)

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Question 6

Taxpayers are not allowed to deduct tax preparation fees as an itemized deduction.

(True/False)

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Question 7

Chuck has AGI of $70,000 and has made the following payments this tax year: State income tax withholding State income tax estimated payrnents Federal income tax withholding Social Security tax withheld from wag State excise tax on liquor State irheritance tax Courty real estate tax School district tax on realty 1,900 850 7,100 4,800 400 1,200 790 510 Calculate the amount of taxes that Chuck can include with his itemized deductions.

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Question 8

Detmer is a successful doctor who earned $204,800 in fees this year, but he also competes in weekend golf tournaments. Detmer reported the following expenses associated with competing in almost a dozen tournaments: Transportation to various tournaments 3,450 Lodging 1,890 Entry fees 920 Golf supplies (balls, tees, etc.) 75 This year Detmer won $5,200 from competing in various golf tournaments. Assuming that Detmer itemizes his deductions and that he did not have any other miscellaneous itemized deductions, what amount of the golfing expenses are deductible after considering all limitations if the tournament golfing is treated as a hobby activity?

(Essay)

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Question 9

Which of the following is a true statement?

(Multiple Choice)

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Question 10

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.

(True/False)

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Question 11

Which of the following is a true statement?

(Multiple Choice)

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Question 12

To qualify as a charitable deduction the donation must be made by cash or by check.

(True/False)

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Question 13

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.

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Question 14

Opal fell on the ice and injured her hip this winter. As a result she paid $3,000 for a visit to the hospital emergency room and $750 for follow-up visits with her doctor. While she recuperated, Opal paid $500 for prescription medicine and $600 to a therapist for rehabilitation. Insurance reimbursed Opal $1,200 for these expenses. What is the amount of Opal's deductible medical expense before considering any AGI limitations?

(Multiple Choice)

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Question 15

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

(True/False)

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Question 16

Which of the following is a true statement?

(Multiple Choice)

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Question 17

Which of the following is a true statement?

(Multiple Choice)

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Question 18

Jenna (age 50) files single and reports AGI of $40,000. This year she has incurred the following medical expenses: Dentist charges Physician's fees Cosmetic surgery Cost of eyeglasses Hospital charges Prescription drugs Over-the-counter drugs Medical insurance premiums 90 2,800 400 250 1,330 240 75 1,200 Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.

(Essay)

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Question 19

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

(Multiple Choice)

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Question 20

Which of the following is a true statement?

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

Taxpayers are not allowed to deduct tax preparation fees as an itemized deduction.

Which of the following is a true statement?

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.

Which of the following is a true statement?

To qualify as a charitable deduction the donation must be made by cash or by check.

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Which of the following is a true statement?

Which of the following is a true statement?

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

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

Individual for Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

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