Exam 5: Itemized Deductions

For purposes of computing the deduction for qualified residence interest,a qualified residence includes the taxpayer's principal residence and one other residence of the taxpayer or spouse.

Define a personal casualty loss.

The interest paid on a loan used to acquire municipal bonds is deductible as investment interest expense.

For the current year,Sheila Jones had adjusted gross income of $100,000.During the year,she contributed $6,000 to her church and an additional $3,000 to qualified charities.She also contributed religious artwork with a fair market value of $60,000 and a basis of $20,000 to her church.The church intends to display the religious artwork in the church foyer.If Sheila chooses to itemize her deductions,what is the amount of her deductible charitable contribution in the current year?

Kassidy is single and age 32.In 2016,she had AGI of $35,000.During the year,she incurred and paid the following medical costs: What is Kassidy's medical expense deduction after application of the adjusted gross income limitation)for her 2016 tax return?

If donated appreciated capital gain property is put to a use that is unrelated to the purpose or function of a charity's tax-exempt status,the contribution must be reduced by the amount of any long-term capital gain that would have been realized if the property had been sold at its fair market value at the time of the contribution.

Shanika lives in California which imposes a state tax on income.For 2016,Shanika had the following transactions related to her state income taxes: Shanika plans to itemize on her 2016 return.What amount of state and local taxes should Shanika deduct in calculating itemized deductions for her 2016 federal income tax return?

In 2016,the U.S.President declared a federal disaster due to the flooding in North Carolina.Dan lives in that area and lost his home in the flood.What choice does he have regarding when he can claim the loss on his tax return?

A taxpayer generally has the option of deducting foreign taxes paid on Schedule A or taking a foreign tax credit.

If one or more non-cash gifts has a fair market value over $500,the taxpayer must:

Which of the following organizations do not qualify for deductible charitable contributions?

For 2016,sales taxes paid may be deducted as an itemized deduction on Schedule A.

For 2016,sales taxes are deductible as an itemized deduction based only on the actual amount of sales taxes paid.

Mrs.Hampton must use a wheelchair.Upon advice from her physician,she installed an elevator and widened the front entrance of her house in 2016,incurring $15,000 and $4,000 in costs,respectively.Mrs.Hampton originally purchased her house for $152,000.An appraisal showed the fair market value of Mrs.Hampton' house immediately after these modifications at $162,000.Compute her currently deductible medical expense in regards to these improvements before AGI limitations.

In 2016,Rachelle's pleasure boat was destroyed by a flood.She had purchased the boat in 2013 for $45,000.On what forms)will Rachelle report this loss?

During 2016,Manuel and Gloria,who are married,incurred acquisition debt on their new residence of $1,150,000.On their joint tax return,what is the amount of their qualified acquisition debt on which they can deduct interest?

Melissa earned net investment income of $11,000 during 2016 and incurred investment interest expense of $3,000 during the year related to a stock purchase.She incurred other investment interest expenses of $7,000 during the year.Melissa is limited to a deduction of $3,000 of investment interest expense in 2016.

Sid makes weekly cash contributions of $30 to his church.He pays by check.Since his annual contributions to the church are more than $250,he must obtain a written acknowledgment from the church to support his contribution deduction.

Taxpayers must itemize their deductions to be allowed a charitable contribution deduction.