Question 1

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

Accepted Answer

A)  personal property taxes assessed on the value of specific property. 
B)  state, local, and foreign income taxes. 
C)  real estate taxes on a residence. 
D)  gasoline taxes on personal travel. 
E)  None of these qualifies as an itemized deduction. 
A)  personal property taxes assessed on the value of specific property. 
B)  state, local, and foreign income taxes. 
C)  real estate taxes on a residence. 
D)  gasoline taxes on personal travel. 
E)  None of these qualifies as an itemized deduction.

Question 2

Which of the following is a true statement?

Accepted Answer

A)  A casualty loss can only occur from storm damage. 
B)  Personal casualty losses can only be deducted to the extent that aggregate casualty losses exceed 10 percent of AGI. 
C)  Individual casualty losses are only deductible if each individual loss exceeds $5,000. 
D)  Uninsured thefts of personal assets are not included with casualty losses. 
E)  All of these are true. 
A)  A casualty loss can only occur from storm damage. 
B)  Personal casualty losses can only be deducted to the extent that aggregate casualty losses exceed 10 percent of AGI. 
C)  Individual casualty losses are only deductible if each individual loss exceeds $5,000. 
D)  Uninsured thefts of personal assets are not included with casualty losses. 
E)  All of these are true.

Question 3

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 these 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 these are true.

Question 4

All investment expenses are itemized deductions.

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

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 these - 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 these - health insurance premiums can only be deducted as an itemized deduction.

Question 7

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: $$\begin{array} { l r } 
\text { Air fare } & \$ 1,300 \
\text { Lodging } & 750 \
\text { Meals } & 600 \
\text { Cab fare } & 220
\end{array}$$ What is the amount of Fred's deduction before the application of any AGI limitations?

Accepted Answer

A)  $2,870 
B)  $2,570 
C)  $2,050 
D)  $1,300 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed. 
A)  $2,870 
B)  $2,570 
C)  $2,050 
D)  $1,300 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed.

Question 8

Larry recorded the following donations this year: $500 cash to a family in need
$2,400 to a church
$500 cash to a political campaign
To the Salvation Army household items that originally cost $1,200 but are worth $300.
What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

Accepted Answer

A)  $2,900 
B)  $1,000 
C)  $2,700 
D)  $4,600 
E)  None of these 
A)  $2,900 
B)  $1,000 
C)  $2,700 
D)  $4,600 
E)  None of these

Question 9

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 these 
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 these

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: $$\begin{array} { l r } 
\text { Travel } & \$ 1,480 \
\text { Paints and canvas } & 610 \
\text { Painting classes } & 230
\end{array}$$ 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 i

Question 11

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Accepted Answer

A) True 
 B)False

Question 12

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 these 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 these are true.

Question 13

In 2014, personal and dependency exemptions are $6,200 for single taxpayers.

Accepted Answer

A) True 
 B)False

Question 14

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 for its charitable purpose 
D)  $150,000 
E)  None of these 
A)  $100,000 
B)  $200,000 
C)  $90,000 if the library uses the painting for its charitable purpose 
D)  $150,000 
E)  None of these

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

Which of the following is a true statement?

Which of the following is a true statement?

All investment expenses are itemized deductions.

Bunching itemized deductions is one form of tax evasion.

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?

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: Air fare \ 1,300 Lodging 750 Meals 600 Cab fare 220 What is the amount of Fred's deduction before the application of any AGI limitations?

Larry recorded the following donations this year: $500 cash to a family in need $2,400 to a church $500 cash to a political campaign To the Salvation Army household items that originally cost $1,200 but are worth $300. What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

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

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Which of the following is a true statement?

In 2014, personal and dependency exemptions are $6,200 for single taxpayers.

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

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters

Exam 6: Individual Deductions

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

Which of the following is a true statement?

Which of the following is a true statement?

All investment expenses are itemized deductions.

Bunching itemized deductions is one form of tax evasion.

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?

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: Air fare \ 1,300 Lodging 750 Meals 600 Cab fare 220 What is the amount of Fred's deduction before the application of any AGI limitations?

Larry recorded the following donations this year: $500 cash to a family in need $2,400 to a church $500 cash to a political campaign To the Salvation Army household items that originally cost $1,200 but are worth $300. What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

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

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Which of the following is a true statement?

In 2014, personal and dependency exemptions are $6,200 for single taxpayers.

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

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters