Question 1

All casualty loss deductions,regardless of the type of asset,are allowed as itemized deductions.

Accepted Answer

A) True 
 B)False

Question 2

Caleb's medical expenses before reimbursement for the year include the following:   Caleb's AGI for the year is $50,000.He is single and age 58.Caleb also receives a reimbursement for medical expenses of $1,000.Caleb's deductible medical expenses that will be added to the other itemized deduction will be

Accepted Answer

A) $10,350. 
B) $9,100. 
C) $14,100. 
D) $10,100. 
A) $10,350. 
B) $9,100. 
C) $14,100. 
D) $10,100.

Question 3

During the current year,Deborah Baronne,a single individual,paid the following amounts:
   How much can Deborah deduct in taxes as itemized deductions?

Accepted Answer

$4,000 + 1,500 + 1,700 = $7,20

Question 4

Mitzi's medical expenses include the following:   Mitzi's AGI for the year is $33,000.She is single and age 49.None of the medical costs are reimbursed by insurance.After considering the AGI floor,Mitzi's medical expense deduction is

Accepted Answer

A) $12,900. 
B) $13,850. 
C) $14,675. 
D) $16,325. 
A) $12,900. 
B) $13,850. 
C) $14,675. 
D) $16,325.

Question 5

Takesha paid $13,000 of investment interest expense in a year in which she earned $4,500 in dividends,$5,400 in interest income,and had a short-term capital gain of $1,000 and a long-term capital gain of $2,200.The capital gains resulted from the sale of stock held as an investment.She has no other investment-related expenses.What is her maximum deduction for investment interest expense,assuming Takesha does not make any elections?

Accepted Answer

A) $5,400 
B) $6,400 
C) $13,100 
D) $13,000 
A) $5,400 
B) $6,400 
C) $13,100 
D) $13,000

Question 6

Phoebe's AGI for the current year is $120,000.Included in this AGI is $100,000 salary and $20,000 of interest income.In earning the investment income,Phoebe paid investment interest expense of $30,000.She also incurred the following expenditures subject to the 2% of AGI limitation:
Investment expenses:
   What is Phoebe's investment interest expense deduction for the year?

Accepted Answer

The answer of Phoebe's AGI for the current year is...

Question 7

Special documentation rules apply to donation of

Accepted Answer

A) motor vehicles. 
B) boats. 
C) airplanes. 
D) All of the above. 
A) motor vehicles. 
B) boats. 
C) airplanes. 
D) All of the above.

Question 8

Teri pays the following interest expenses during the year:   What is the amount of interest expense that can be deducted as an itemized deduction?

Accepted Answer

A) $10,500 
B) $10,900 
C) $14,300 
D) $14,700 
A) $10,500 
B) $10,900 
C) $14,300 
D) $14,700

Question 9

Phuong has the following sources of investment income:   Barring any special elections,how much of the investment income will be included in calculating net investment income for purposes of the investment interest expense limitation?

Accepted Answer

A) $2,000 
B) $7,000 
C) $5,000 
D) $15,000 
A) $2,000 
B) $7,000 
C) $5,000 
D) $15,000

Question 10

Sacha purchased land in 2010 for $35,000 that she held as a capital asset.This year,she contributed the land to the Boy Scouts of America (a charitable organization)for use as a site for a summer camp.The market value of the land at the date of contribution is $40,000.Sacha's adjusted gross income is $90,000.Assuming no special elections,Sacha's maximum deductible contribution this year is

Accepted Answer

A) $13,000. 
B) $27,000. 
C) $35,000. 
D) $40,000. 
A) $13,000. 
B) $27,000. 
C) $35,000. 
D) $40,000.

Question 11

Investment interest expense which is disallowed because it exceeds the taxpayer's net investment income may be carried over and treated as incurred in subsequent years.

Accepted Answer

A) True 
 B)False

Question 12

Taxpayers may elect to include net capital gain as part of investment income.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not required substantiation for a noncash charitable contribution?

Accepted Answer

A) name and address of charitable organization 
B) method used to determine the donated property's fair market value 
C) date and location of property donated 
D) use of donation by charitable organization 
A) name and address of charitable organization 
B) method used to determine the donated property's fair market value 
C) date and location of property donated 
D) use of donation by charitable organization

Question 14

What is the treatment of charitable contributions in excess of the applicable limits for the current year?

Accepted Answer

The charitable contribution in excess of

Question 15

Finance charges on personal credit cards are deductible interest expense.

Accepted Answer

A) True 
 B)False

Question 16

Doris donated a diamond brooch recently appraised at $25,000 to her local church.Doris had purchased it many years ago for $10,000.The church sold the brooch to provide funding for church programming.Doris' AGI is $40,000.Doris will be able to take a charitable deduction of

Accepted Answer

A) $10,000. 
B) $25,000. 
C) $12,000. 
D) $20,000. 
A) $10,000. 
B) $25,000. 
C) $12,000. 
D) $20,000.

Question 17

Patrick's records for the current year contain the following information. -He donated stock having a fair market value of $5,000 to a qualified charitable organization.Patrick acquired the stock two years ago at a cost of $3,000.
-He paid $1,000 for membership in an athletic scholarship program maintained by the university.The only benefit of the membership is that Patrick is entitled to purchase a season ticket to the university's home football games.
-He also donated $7,500 cash to a qualified charitable organization.Patrick's adjusted gross income for the year is $100,000.
What is the amount of his charitable contribution deduction?

Accepted Answer

A) $11,300 
B) $11,500 
C) $13,300 
D) $13,500 
A) $11,300 
B) $11,500 
C) $13,300 
D) $13,500

Question 18

Carl purchased a machine for use in his trade or business two years ago for $30,000.During the current year,Carl donates the machine to the local community college.At the time of the contribution,the machine's adjusted basis is $10,000 and its FMV is $15,000.Carl's AGI for the year is $48,000.What is the amount of his charitable contribution deduction?

Accepted Answer

A) $10,000 
B) $14,000 
C) $15,000 
D) $25,000 
A) $10,000 
B) $14,000 
C) $15,000 
D) $25,000

Question 19

A review of the 2017 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2017 tax status:   In 2018,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

Accepted Answer

A) include $200 in gross income for 2018. 
B) include $1,200 in gross income for 2018. 
C) reduce 2018's medical expenses by $1,200. 
D) amend the 2018 return. 
A) include $200 in gross income for 2018. 
B) include $1,200 in gross income for 2018. 
C) reduce 2018's medical expenses by $1,200. 
D) amend the 2018 return.

Question 20

In general,the deductibility of interest depends on the purpose for which the indebtedness is incurred.

Accepted Answer

A) True 
 B)False

Exam 23: Itemized Deductions

All casualty loss deductions,regardless of the type of asset,are allowed as itemized deductions.

During the current year,Deborah Baronne,a single individual,paid the following amounts: How much can Deborah deduct in taxes as itemized deductions?

Mitzi's medical expenses include the following: Mitzi's AGI for the year is $33,000.She is single and age 49.None of the medical costs are reimbursed by insurance.After considering the AGI floor,Mitzi's medical expense deduction is

Special documentation rules apply to donation of

Teri pays the following interest expenses during the year: What is the amount of interest expense that can be deducted as an itemized deduction?

Phuong has the following sources of investment income: Barring any special elections,how much of the investment income will be included in calculating net investment income for purposes of the investment interest expense limitation?

Investment interest expense which is disallowed because it exceeds the taxpayer's net investment income may be carried over and treated as incurred in subsequent years.

Taxpayers may elect to include net capital gain as part of investment income.

Which of the following is not required substantiation for a noncash charitable contribution?

What is the treatment of charitable contributions in excess of the applicable limits for the current year?

Finance charges on personal credit cards are deductible interest expense.

Doris donated a diamond brooch recently appraised at $25,000 to her local church.Doris had purchased it many years ago for $10,000.The church sold the brooch to provide funding for church programming.Doris' AGI is $40,000.Doris will be able to take a charitable deduction of

A review of the 2017 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2017 tax status: In 2018,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

In general,the deductibility of interest depends on the purpose for which the indebtedness is incurred.

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