Question 1

Explain what types of tax planning are available for taxpayers making charitable contributions.

Accepted Answer

1.A taxpayer who plans to sell a substan

Question 2

Corporate charitable deductions are limited to 10% of the corporation's taxable income for the year.

Accepted Answer

A) True 
 B)False

Question 3

In the current year,Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense.What is the maximum amount of investment interest expense she is allowed to deduct this year?

Accepted Answer

A)  $0 
B)  $3,000 deductible this year; $11,000 carried forward to next year 
C)  $9,000 deductible this year; $5,000 carried forward to next year 
D)  $14,000 deductible this year; nothing to be carried forward to next year 
A)  $0 
B)  $3,000 deductible this year; $11,000 carried forward to next year 
C)  $9,000 deductible this year; $5,000 carried forward to next year 
D)  $14,000 deductible this year; nothing to be carried forward to next year

Question 4

Wang,a licensed architect employed by Skye Architects,incurred the following unreimbursed expenses this year:
 
Wang's AGI is $75,000.What is his net deduction for miscellaneous itemized deductions?

Accepted Answer

A)  $0 
B)  $1,900 
C)  $800 
D)  $1,500 
A)  $0 
B)  $1,900 
C)  $800 
D)  $1,500

Question 5

A taxpayer is allowed to deduct interest expense incurred on home equity indebtedness limited to the lesser of $100,000 or the home equity (FMV of the residence less the acquisition indebtedness).

Accepted Answer

A) True 
 B)False

Question 6

Self-employed individuals may deduct the full self-employment taxes paid as a for AGI deduction.

Accepted Answer

A) True 
 B)False

Question 7

Jeffrey,a T.V.news anchor,is concerned about the wrinkles around his eyes.Because it is job-related,the cost of a face lift to eliminate these wrinkles is a deductible medical expense.

Accepted Answer

A) True 
 B)False

Question 8

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 9

All of the following are deductible as medical expenses except

Accepted Answer

A)  vitamins and health foods that improve a taxpayer's general health. 
B)  payments for a vision exam and contact lenses. 
C)  payments to a hospital for laboratory fees and X-rays for diagnosis of a medical problem. 
D)  cosmetic surgery necessary to correct a deformity arising from a congenital abnormality. 
A)  vitamins and health foods that improve a taxpayer's general health. 
B)  payments for a vision exam and contact lenses. 
C)  payments to a hospital for laboratory fees and X-rays for diagnosis of a medical problem. 
D)  cosmetic surgery necessary to correct a deformity arising from a congenital abnormality.

Question 10

Acquisition indebtedness for a personal residence includes debt incurred to substantially improve the residence.

Accepted Answer

A) True 
 B)False

Question 11

The following taxes are deductible as itemized deductions with the exception of

Accepted Answer

A)  state income taxes. 
B)  federal income taxes. 
C)  foreign real property taxes. 
D)  local personal property taxes. 
A)  state income taxes. 
B)  federal income taxes. 
C)  foreign real property taxes. 
D)  local personal property taxes.

Question 12

A personal property tax based on the weight of the property is deductible.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is deductible as interest expense?

Accepted Answer

A)  personal credit card interest 
B)  interest to purchase tax-exempt bonds 
C)  bank service charges on personal account 
D)  interest on a home equity loan to purchase a car 
A)  personal credit card interest 
B)  interest to purchase tax-exempt bonds 
C)  bank service charges on personal account 
D)  interest on a home equity loan to purchase a car

Question 14

Hui pays self-employment tax on her sole proprietorship income,supplemental Medicare surtaxes on excess wages and self-employment income (the .09% tax) and supplemental Medicare taxes on investment income (the 3.8% tax).Which of the following statements is correct regarding the deductibility of these taxes?

Accepted Answer

A)  All three of the taxes are deductible as itemized deductions. 
B)  One-half of the self-employment tax is deductible for AGI, and the .09% and 3.8% taxes are itemized deductions. 
C)  None of the taxes are allowed as a deduction. 
D)  One-half of the self-employment tax is deductible for AGI, but the .09% and 3.8% taxes are not allowed as deductions. 
A)  All three of the taxes are deductible as itemized deductions. 
B)  One-half of the self-employment tax is deductible for AGI, and the .09% and 3.8% taxes are itemized deductions. 
C)  None of the taxes are allowed as a deduction. 
D)  One-half of the self-employment tax is deductible for AGI, but the .09% and 3.8% taxes are not allowed as deductions.

Question 15

Van pays the following medical expenses this year:
• $1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse.
• $300 for Van's eyeglasses.
• $900 for Van's dental work.
• $3,800 for Van's face lift.Van,a newscaster,is worried about the wrinkles around his eyes.
How much can Van include on his return as qualified medical expenses before limitation?

Accepted Answer

A)  $1,200 
B)  $2,400 
C)  $2,700 
D)  $6,500 
A)  $1,200 
B)  $2,400 
C)  $2,700 
D)  $6,500

Question 16

Assessments made against real estate for the purpose of funding new street lights are not deductible in the year paid but rather should be added to the cost basis of the property.

Accepted Answer

A) True 
 B)False

Question 17

Jorge contributes $35,000 to his church and 100 shares of XYZ stock to the American Red Cross.The shares were purchased three years ago for $10,000 but were worth $18,000 as of the donation date.Jorge's AGI this year is $100,000.Assuming no elections are made,determine his current year charitable contribution deduction and the amount of any carryover to next year?

Accepted Answer

Jorge will be allowed to fully deduct th

Question 18

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 19

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 20

During the year Jason and Kristi,cash-basis taxpayers,paid the following taxes:
 
What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in the current year?

Accepted Answer

A)  $7,900 
B)  $8,900 
C)  $10,900 
D)  $15,400 
A)  $7,900 
B)  $8,900 
C)  $10,900 
D)  $15,400

Explain what types of tax planning are available for taxpayers making charitable contributions.

Corporate charitable deductions are limited to 10% of the corporation's taxable income for the year.

In the current year,Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense.What is the maximum amount of investment interest expense she is allowed to deduct this year?

Wang,a licensed architect employed by Skye Architects,incurred the following unreimbursed expenses this year: Wang's AGI is $75,000.What is his net deduction for miscellaneous itemized deductions?

A taxpayer is allowed to deduct interest expense incurred on home equity indebtedness limited to the lesser of $100,000 or the home equity (FMV of the residence less the acquisition indebtedness).

Self-employed individuals may deduct the full self-employment taxes paid as a for AGI deduction.

Jeffrey,a T.V.news anchor,is concerned about the wrinkles around his eyes.Because it is job-related,the cost of a face lift to eliminate these wrinkles is a deductible medical expense.

All of the following are deductible as medical expenses except

Acquisition indebtedness for a personal residence includes debt incurred to substantially improve the residence.

The following taxes are deductible as itemized deductions with the exception of

A personal property tax based on the weight of the property is deductible.

Which of the following is deductible as interest expense?

Assessments made against real estate for the purpose of funding new street lights are not deductible in the year paid but rather should be added to the cost basis of the property.

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?

During the year Jason and Kristi,cash-basis taxpayers,paid the following taxes: What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in the current year?

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 7: Itemized Deductions

Explain what types of tax planning are available for taxpayers making charitable contributions.

Corporate charitable deductions are limited to 10% of the corporation's taxable income for the year.

In the current year,Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense.What is the maximum amount of investment interest expense she is allowed to deduct this year?

Wang,a licensed architect employed by Skye Architects,incurred the following unreimbursed expenses this year: Wang's AGI is $75,000.What is his net deduction for miscellaneous itemized deductions?

A taxpayer is allowed to deduct interest expense incurred on home equity indebtedness limited to the lesser of $100,000 or the home equity (FMV of the residence less the acquisition indebtedness).

Self-employed individuals may deduct the full self-employment taxes paid as a for AGI deduction.

Jeffrey,a T.V.news anchor,is concerned about the wrinkles around his eyes.Because it is job-related,the cost of a face lift to eliminate these wrinkles is a deductible medical expense.

All of the following are deductible as medical expenses except

Acquisition indebtedness for a personal residence includes debt incurred to substantially improve the residence.

The following taxes are deductible as itemized deductions with the exception of

A personal property tax based on the weight of the property is deductible.

Which of the following is deductible as interest expense?

Assessments made against real estate for the purpose of funding new street lights are not deductible in the year paid but rather should be added to the cost basis of the property.

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?

During the year Jason and Kristi,cash-basis taxpayers,paid the following taxes: What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in the current year?

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters