Exam 5: Itemized Deductions and Other Incentives

​Charu is charged $70 by the state she lives in related to vehicle registration based on the weight of her personal auto. Charu can deduct the $70 as an itemized deduction.

Which of the following taxes is not deductible as an itemized deduction?

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

The cost of a fishing license is considered a personal property tax and is deductible as an itemized deduction.

Jerry and Ann paid the following amounts during the current year: What is the maximum amount they can use as interest expense in calculating itemized deductions for the current year?

Kat owns a small bungalow which is destroyed in a fire. Kat is not insured for fire. The bungalow originally cost $22,000, but was worth $45,000 before the fire. Kat has $30,000 of adjusted gross income. How much can Kat claim as a casualty loss in her tax return? Explain.

Rachel's employer does not have an accountable plan for employee expenses. Her employer reimburses her for $3,000 of business travel expenses. a.How much of the reimbursement must Rachel include in income? b.How much can Rachel take as a miscellaneous itemized deduction subject to the 2 percent floor?

In 2016, David, age 65, had adjusted gross income of $32,000. During the year he paid the following medical expenses: ​ What amount can David deduct as medical expenses (after the adjusted gross income limitation) in calculating his itemized deductions for 2016?

Don gives his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Jon, age 45, had adjusted gross income of $26,000 in 2016. During the year, he incurred and paid the following medical expenses: Jon received $900 in 2016 as a reimbursement for a portion of the doctors' fees. If Jon were to itemize his deductions, what would be his allowable medical expense deduction after the adjusted gross income limitation is taken into account?

For 2016, Eugene and Linda had adjusted gross income of $30,000. Additional information for 2016 is as follows: What is the maximum amount that they can use as a deduction for charitable contributions for 2016?

Jake developed serious health problems and had his bathroom remodeled so it is wheelchair-accessible and had a handicapped shower installed, based on a written prescription by his doctor. The cost of the remodel is $15,000 and is deemed to add no value to his house by a real estate appraiser. How is the cost of the remodel treated on Jake's tax return?

​Foreign income taxes paid are deductible.

Alicia is a single taxpayer with AGI of $338,400 and itemized deductions of $100,000 which are made up of $30,000 of mortgage interest, $30,000 of state income taxes and property taxes, and $40,000 of contributions to her temple. What is the amount of itemized deductions that Alicia may deduct on her 2016 income tax return after the phase-out for high-income taxpayers?

Casualty and theft losses must be reduced by amounts recovered from insurance coverage.

Peter is a plumber employed by a major contracting firm. During the current year, he paid the following miscellaneous expenses: If Peter were to itemize his deductions for the current year, what amount could he claim as miscellaneous itemized deductions (before applying the 2 percent of adjusted gross income limitation)?

An accountable expense reimbursement plan:

​All taxpayers may deduct up to $4,000 of higher education tuition expenses.

Newt is a single taxpayer living in Hollywood, California, with adjusted gross income for the 2016 tax year of $43,050. Newt's employer withheld $3,700 in state income tax from his salary. In April of 2016, he paid $300 in additional state taxes for his prior year's return. The real estate taxes on his home are $1,800 for 2016 and his personal property tax based on the value of his automobile is $75. Also, he paid $210 for state gasoline taxes for the year. The IRS estimate of general sales tax for Newt is $1,200 for 2016. ​ How much should Newt deduct on Schedule A of Form 1040 of his 2016 tax return for taxes paid?

Which of the following interest expense amounts is not deductible 2016?