Exam 10: Deductions and Losses: Certain Itemized Deductions

Sandra is single and does a lot of business entertaining at home.Because Arthur,Sandra's 80-year old dependent grandfather who lived with Sandra,needs medical and nursing care,he moved to Twilight Nursing Home.During the year,Sandra made the following payments on behalf of Arthur: ​ Twilight has medical staff in residence.Disregarding the AGI floor,how much,if any,of these expenses qualify for a medical deduction by Sandra?

Mason,a physically handicapped individual,pays $10,000 this year for the installation of wheelchair ramps,support bars,and railings in his personal residence.These improvements increase the value of his personal residence by $2,000.Only $8,000 of the expenditure qualifies as a medical expense for tax purposes.

Harry and Sally were divorced three years ago.In July of the current year,their son,Joe,broke his arm falling out of a tree.Joe lives with Sally and Sally claims him as a dependent on her tax return.Harry paid for the medical expenses related to Joe's injury.Can Harry claim the medical expenses he paid for Joe on his tax return?

For calendar year 2017,Jon and Betty Hansen (ages 59 and 60) file a joint return reflecting AGI of $280,000.They incur the following expenditures: What is the amount of itemized deductions the Hansens may claim?

Sergio was required by the city to pay $2,000 for the cost of new curbing installed by the city in front of his personal residence.The new curbing was installed throughout Sergio's neighborhood as part of a street upgrade project.Sergio may not deduct $2,000 as a tax,but he may add the $2,000 to the basis of his property.

Charitable contributions that exceed the percentage limitations for the current year can be carried over for up to three years.

Which of the following items would be an itemized deduction on Schedule A of Form 1040 not subject to the 2%-of-AGI floor?

In 2017,Dena traveled 600 miles for specialized medical treatment that was not available in her hometown.She paid $90 for meals during the trip,$145 for a hotel room for one night,and $15 in parking fees.She did not keep records of other out-of-pocket costs for transportation.Dena can include $167 in computing her medical expenses.

Personal expenditures that are deductible as itemized deductions include medical expenses,Federal income taxes,state income taxes,property taxes on a personal residence,mortgage interest,and charitable contributions.

Al contributed a painting to the Metropolitan Art Museum of St.Louis,Missouri.The painting,purchased six years ago,was worth $40,000 when donated,and Al's basis was $25,000.If this painting is immediately sold by the museum and the proceeds are placed in the general fund,Al's charitable contribution deduction is $25,000 (subject to percentage limitations).

Jim's employer pays half of the premiums on a group medical insurance plan covering all employees,and employees pay the other half.Jim can exclude the half of the premium paid by his employer from his gross income and may include the half he pays in determining his medical expense deduction.

Fred and Lucy are married,ages 33 and 32,and together have AGI of $120,000 in 2017.They have four dependents and file a joint return.They pay $5,000 for a high deductible health insurance policy and contribute $2,600 to a qualified Health Savings Account.During the year,they paid the following amounts for medical care: $9,200 in doctor and dentist bills and hospital expenses,and $3,000 for prescribed medicine and drugs.In October 2017,they received an insurance reimbursement of $4,400 for the hospitalization.They expect to receive an additional reimbursement of $1,000 in January 2018.Determine the maximum itemized deduction allowable for medical expenses in 2017.

Brian,a self-employed individual,pays state income tax payments of: ​ $900 on January 17,2017 (4th estimated tax payment for 2016) $1,000 on April 17,2017 (1st estimated tax payment in 2017) $1,000 on June 15,2017 (2nd estimated tax payment in 2017) $1,000 on September 15,2017 (3rd estimated tax payment in 2017) $800 on January 16,2018 (4th estimated tax payment of 2017) Brian had a tax overpayment of $500 on his 2016 state income tax return and applied this to his 2017 state income taxes.What is the amount of Brian's state income tax itemized deduction for his 2017 Federal income tax return?

Interest paid or accrued during the tax year on aggregate acquisition indebtedness of $2 million or less ($1 million or less for married persons filing separate returns) is deductible as qualified residence interest.

Georgia had AGI of $100,000 in 2017.She donated Heron Corporation stock with a basis of $8,500 to a qualified charitable organization on July 5,2017. ​ a.What is the amount of Georgia's deduction, assuming that she purchased the stock on December 4, 2016, and the stock had a fair market value of $15,000 when she made the donation? a., except that Georgia purchased the stock on July 1, 2009. a., except that the stock had a fair market value of $6,000 (rather than $15,000) when Georgia donated it to the charity. b.Assume the same facts as in c.Assume the same facts as in

Upon the recommendation of a physician,Ed has a swimming pool installed at his residence because of a heart condition.If he is allowed to deduct all or part of the cost of the pool,Ed's increase in utility bills due to the operation of the pool qualifies as a medical expense.

In order to dissuade his pastor from resigning and taking a position with a larger church,Michael,an ardent leader of the congregation,gives the pastor a new car.The cost of the car is deductible by Michael as a charitable contribution.

Shirley sold her personal residence to Mike for $400,000.Before the sale,Shirley paid the real estate taxes of $7,030 for the calendar year.For income tax purposes,the deduction is apportioned as follows: $4,000 to Shirley and $3,030 to Mike. a. What is Mike's basis in the residence? b. What is Shirley's amount realized from the sale of the residence? c. What amount of real estate taxes can Mike deduct? d. What amount of real estate taxes can Shirley deduct?

The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer's filing status.

Leona borrows $100,000 from First National Bank and uses the proceeds to purchase City of Houston bonds.The interest Leona pays on this loan is deductible as investment interest subject to the investment interest limits.