Exam 6: Individual Deductions

Justin and Georgia file married jointly with one dependent. This year, their AGI is $319,050. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property. Determine Alexandra's AGI for 2014. Revenue from auto repairs \ 143,930 Salaries paid to mechanics 72,210 Supplies and tools 18,500 Revenues from gas station partnership (Alexandra's share) 125,000 Expenses from gas station partnership (Alexandra's share) 95,200 Self-employment tax (1/2 is employer's share) 12,702

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 $\quad\quad\quad\quad\quad\quad\quad\$ 3,450$ Lodging $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad1,890$ Entry fees $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad920$ Golf supplies (balls, tees, etc.) $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad75$ This year Detmer won $5,200 from competing in various golf tournaments. Assuming that Detmer itemizes his deductions, what amount of the golfing expenses are deductible after considering all limitations if the tournament golfing is treated as a hobby activity?

This year Darcy made the following charitable contributions: State University IBM stock \ 15,000 \ 10,500 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.

Glenn is an accountant who races stock cars as a hobby. This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races. What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

To deduct a moving expense, the taxpayer must be employed or self employed for a specific amount of time after the move.

The deduction for charitable contributions is limited to ten percent of the taxpayer's AGI whereas casualty losses on personal assets are only deductible to the extent the losses exceed ten percent of the taxpayer's AGI.

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?

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 $5,260 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?

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

Jill currently lives in the suburbs and commutes 25 miles to her office in downtown Freeport. She is considering quitting her current job to look for new employment in the downtown area. Which of the following statements best describes how Jill can satisfy the distance test for deducting moving expenses if she accepts a new job in downtown Freeport?

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Mason deduct as a qualifying education expense if he files single and reports modified AGI of $60,000 (assume the 2013 rules apply for purposes of the qualified education expense deduction)?

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 this year?

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 qualifying medical expense?

This year, Jong paid $3,000 of interest on a qualified education loan. Jong files married joint and reports modified AGI of $142,000. What is Jong's deduction for interest expense on an educational loan?

Misti purchased a residence this year. Misti is a single parent and lives with her 1-year old daughter. This year, Misti received a salary of $63,000 and made the following payments: Home mortgage interest $\quad\quad\quad\quad\quad\quad\quad\$ 2,335$ Real estate taxes $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad1,525$ State income taxes paid $\quad\quad\quad\quad\quad\quad\quad\quad1,340$ Income tax preparation fee $\quad\quad\quad\quad\quad\quad\quad250$ Charitable contributions (cash to their church) $\quad120$ Misti files as a head of household and claims two exemptions. Calculate her taxable income this year.

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

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?

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?