Question 1

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Accepted Answer

A)  gambling losses to the extent of gambling winnings 
B)  fees for investment advice 
C)  employee business expenses 
D)  tax preparation fees 
E)  All of these are subject to the 2 percent of AGI floor limit. 
A)  gambling losses to the extent of gambling winnings 
B)  fees for investment advice 
C)  employee business expenses 
D)  tax preparation fees 
E)  All of these are subject to the 2 percent of AGI floor limit.

Question 2

Kaylee is a self-employed investment counselor who also owns a rental property. This year, she collected $85,000 in fees and paid the following expenses: $$\begin{array} { l r } 
\text { Health insurance premiums (not through an exchange) } & \$ 4,200 \
\text { Life insurance premiums (whole life) } & 1,900 \
\text { Books on investing } & 200 \
\text { Repairs of the rental property } & 450 \
\text { Advertising for investment clients } & 1,770 \
\text { State income taxes } & 4,300 \
\text { Self employment tax (1/2 is employer share) } & 12,704
\end{array}$$ Kaylee files single with one personal exemption. Calculate her adjusted gross income.

Accepted Answer

$72,028 =

Question 3

Which of the following expenses can be deducted as moving expenses? 1. The cost of a trip to purchase a new residence
2) The cost of moving personal belongings
3) Lodging (one night) while en route
4) The cost of gasoline when traveling to the new residence
5) One-half of the cost of meals while en route to the new residence

Accepted Answer

A)  Numbers 1, 2, and 4 only. 
B)  Numbers 1 through 3 only. 
C)  Numbers 2 through 4 only. 
D)  Numbers 2 through 5 only. 
E)  All of these are deductible as moving expenses. 
A)  Numbers 1, 2, and 4 only. 
B)  Numbers 1 through 3 only. 
C)  Numbers 2 through 4 only. 
D)  Numbers 2 through 5 only. 
E)  All of these are deductible as moving expenses.

Question 4

In 2013, taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

Accepted Answer

A) True 
 B)False

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

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 9

Which of the following itemized deductions is not subject to the itemized deduction phase-out?

Accepted Answer

A)  gambling losses 
B)  mortgage interest 
C)  state income tax 
D)  charitable contributions 
E)  All of these are subject to the itemized deduction phase-out. 
A)  gambling losses 
B)  mortgage interest 
C)  state income tax 
D)  charitable contributions 
E)  All of these are subject to the itemized deduction phase-out.

Question 10

Which of the following is a true statement?

Accepted Answer

A)  Expenses associated with a "hobby" are never deductible. 
B)  The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances. 
C)  Taxpayers engaged in a "hobby" are always presumed to be motivated by profit. 
D)  The regulations do not provide any guidance for determining whether an activity is profit motivated. 
E)  All of these are true. 
A)  Expenses associated with a "hobby" are never deductible. 
B)  The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances. 
C)  Taxpayers engaged in a "hobby" are always presumed to be motivated by profit. 
D)  The regulations do not provide any guidance for determining whether an activity is profit motivated. 
E)  All of these are true.

Question 11

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

Accepted Answer

A) True 
 B)False

Question 12

Clark is a registered nurse and full time employee of the Hays Hospital. To maintain his nursing license Clark has incurred the following expenses: Nursing uniforms$\quad\quad\quad\quad\quad\quad\quad\quad\quad\$ 1,650$
Union dues$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad400$
Professional dues and license$\quad\quad\quad\quad\quad800$
Continuing education courses$\quad\quad\quad\quad\quad450$ Clark was reimbursed $1,250 of his expenses from his Hays Hospital accountable reimbursement plan. What amount can he include with his remaining itemized deductions if his AGI this year is $52,000?

Accepted Answer

$1,010 = [($1,650 +

Question 13

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 these costs is 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 these costs is deductible.

Question 14

Grace is a single medical student at State University, a qualified educational institution. This year Grace paid university tuition of $12,000. Grace works part-time at the University library, and this year she reports $15,000 of salary and no other items of income or expense. Which of the following is a true statement?

Accepted Answer

A)  Grace can deduct all of her tuition for AGI as a business expense. 
B)  Grace can deduct all of her tuition as a miscellaneous itemized deduction. 
C)  Grace can only deduct half of her tuition for AGI as a business expense. 
D)  Grace can only deduct half of her tuition as a miscellaneous itemized deduction. 
E)  All of these are false. 
A)  Grace can deduct all of her tuition for AGI as a business expense. 
B)  Grace can deduct all of her tuition as a miscellaneous itemized deduction. 
C)  Grace can only deduct half of her tuition for AGI as a business expense. 
D)  Grace can only deduct half of her tuition as a miscellaneous itemized deduction. 
E)  All of these are false.

Question 15

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony. What is Tiffanie's AGI?

Accepted Answer

$66,250 ($62,700 + $

Question 16

Which of the following is a true statement?

Accepted Answer

A)  Fees for investment advice are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
B)  Unreimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
C)  Fees for tax preparation are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
D)  Reimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation unless the employer's reimbursement plan qualifies as an accountable plan. 
E)  All of these are true. 
A)  Fees for investment advice are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
B)  Unreimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
C)  Fees for tax preparation are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation. 
D)  Reimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation unless the employer's reimbursement plan qualifies as an accountable plan. 
E)  All of these are true.

Question 17

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance.

Accepted Answer

A) True 
 B)False

Question 18

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: $$\begin{array} { l r } 
\text { Auto insurance premiums } & \$ 1,700 \
\text { Room and board at Todd's school } & 2,200 \
\text { Health insurance premiums (not through an exchange) } & 600 \
\text { Travel (to and from school) } & 350
\end{array}$$ What amount can Ned include in his itemized deductions?

Accepted Answer

A)  $1,700 included in Ned's miscellaneous itemized deductions 
B)  $2,050 included in Ned's miscellaneous itemized deductions 
C)  $950 included in Ned's miscellaneous itemized deductions 
D)  $600 included in Ned's medical expenses 
E)  None of these. 
A)  $1,700 included in Ned's miscellaneous itemized deductions 
B)  $2,050 included in Ned's miscellaneous itemized deductions 
C)  $950 included in Ned's miscellaneous itemized deductions 
D)  $600 included in Ned's medical expenses 
E)  None of these.

Question 19

This year Riley files single and reports AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Accepted Answer

A)  The deduction for qualifying education interest is $1,200. 
B)  The deduction for qualifying education interest is $1,000. 
C)  The deduction for qualifying education interest is $720. 
D)  The deduction for qualifying education interest is $200. 
E)  None of these. 
A)  The deduction for qualifying education interest is $1,200. 
B)  The deduction for qualifying education interest is $1,000. 
C)  The deduction for qualifying education interest is $720. 
D)  The deduction for qualifying education interest is $200. 
E)  None of these.

Question 20

All investment expenses are itemized deductions.

Accepted Answer

A) True 
 B)False

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

In 2013, taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

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

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

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?

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 itemized deductions is not subject to the itemized deduction phase-out?

Which of the following is a true statement?

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

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

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony. What is Tiffanie's AGI?

Which of the following is a true statement?

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance.

This year Riley files single and reports AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

All investment expenses are itemized deductions.

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

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters

Exam 6: Individual Deductions

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

In 2013, taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

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

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

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?

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 itemized deductions is not subject to the itemized deduction phase-out?

Which of the following is a true statement?

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

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

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony. What is Tiffanie's AGI?

Which of the following is a true statement?

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance.

This year Riley files single and reports AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

All investment expenses are itemized deductions.

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

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters