Question 1

Taxes assessed for local benefits, such as a new sidewalk, are deductible as real property taxes.

Accepted Answer

A) True 
 B)False

Question 2

Rick and Claudia live in an apartment and have purchased land where they plan to build their home. They have a mortgage on the lot and have received a Form 1098 from the lender showing the interest paid on the note. Interest paid on this loan is deductible as home mortgage interest on their Schedule A.

Accepted Answer

A) True 
 B)False

Question 3

In 2015, Allen's pleasure boat was destroyed by a flood. He had purchased the boat in 2012 for $45,000. On what form(s) will Allen report this loss?

Accepted Answer

A)  Form 4684, Casualties and Thefts, and Schedule A, Itemized Deductions. 
B)  Form 4684, Casualties and Theft, and Schedule D, Capital Gains and Losses. 
C)  Form 4797, Sales of Business Property and Involuntary Conversions, and Schedule D, Capital Gains and Losses. 
D) On the first page of Form 1040. 
A)  Form 4684, Casualties and Thefts, and Schedule A, Itemized Deductions. 
B)  Form 4684, Casualties and Theft, and Schedule D, Capital Gains and Losses. 
C)  Form 4797, Sales of Business Property and Involuntary Conversions, and Schedule D, Capital Gains and Losses. 
D) On the first page of Form 1040.

Question 4

For 2015, the AGI threshold for the deductibility of personal casualty losses generally is:

Accepted Answer

A)  2%. 
B)  5%. 
C)  7.5%. 
D) 10%. 
A)  2%. 
B)  5%. 
C)  7.5%. 
D) 10%.

Question 5

What are four major categories of deductible taxes for individual returns?

Accepted Answer

Answer1. Personal property tax

Question 6

Abel's car was completely destroyed in an accident that was his fault. His loss was $8,500 and his insurance company reimbursed him $6,500. What amount of casualty loss can Abel claim on his return (beforedeductionlimitations)?

Accepted Answer

A)  $0 
B)  $2,000 
C)  $6,500 
D) $8,500 
A)  $0 
B)  $2,000 
C)  $6,500 
D) $8,500

Question 7

Personal property taxes paid on personal-use assets, such as the family car, are deductible on Schedule A.

Accepted Answer

A) True 
 B)False

Question 8

For 2015, Lydia had adjusted gross income of $40,000 and made the following charitable contributions:   What is the maximum amount that she can deduct as a charitable contribution for 2015?

Accepted Answer

A)  $3,200. 
B)  $3,050. 
C)  $1,850. 
D) $1,650. 
A)  $3,200. 
B)  $3,050. 
C)  $1,850. 
D) $1,650.

Question 9

Which of the following miscellaneous itemized deductions are not subject to the 2% adjusted gross income limitation?

Accepted Answer

A)  Investment publications expense. 
B)  Gambling losses, which are deductible up to the amount of gambling winnings. 
C)  Tax preparation fees. 
D) Job-hunting expenses. 
A)  Investment publications expense. 
B)  Gambling losses, which are deductible up to the amount of gambling winnings. 
C)  Tax preparation fees. 
D) Job-hunting expenses.

Question 10

For 2015, sales taxes paid may be deducted as an itemized deduction on Schedule A.

Accepted Answer

A) True 
 B)False

Question 11

For determination of deductibility, all personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Accepted Answer

A) True 
 B)False

Question 12

The threshold amount for the deductibility of allowable medical expenses for those under 65 in 2015 is:

Accepted Answer

A)  10% of AGI. 
B)  10% of taxable income. 
C)  7.5% of AGI. 
D) 7.5% of taxable income. 
A)  10% of AGI. 
B)  10% of taxable income. 
C)  7.5% of AGI. 
D) 7.5% of taxable income.

Question 13

Which of the following items would be an itemized deduction on Schedule A of Form 1040 subjectto the 2% of AGI floor?

Accepted Answer

A)  Professional dues to membership organizations. 
B)  Work uniforms that cannot be used for normal wear. 
C)  Job-hunting costs. 
D) All of these. 
A)  Professional dues to membership organizations. 
B)  Work uniforms that cannot be used for normal wear. 
C)  Job-hunting costs. 
D) All of these.

Question 14

If a taxpayer's personal property is completely destroyed, the casualty loss deduction is still reduced by a required floor amount.

Accepted Answer

A) True 
 B)False

Question 15

What are the general limits or floors placed on deductible personal casualty losses?

Accepted Answer

First, each separate casualty is reduced

Question 16

Taxes deductible as an itemized deduction include all of the following except:

Accepted Answer

A)  Personal property taxes based on the value of the property. 
B)  Taxes that the taxpayer paid on property owned by his/her parents or children. 
C)  State and local income taxes. 
D) Real estate taxes based on the assessed value of the property. 
A)  Personal property taxes based on the value of the property. 
B)  Taxes that the taxpayer paid on property owned by his/her parents or children. 
C)  State and local income taxes. 
D) Real estate taxes based on the assessed value of the property.

Question 17

Which of the following expenses is deductible, but subject to the 2% limitation on Form 1040, Schedule A, Job Expenses and Most Other Miscellaneous Itemized Deductions?

Accepted Answer

A)  A blue suit for an accountant. 
B)  Appraisal fees on the sale of a personal residence. 
C)  Uniforms for a UPS delivery person. 
D) The cost of hauling tools to work in the trunk of a car. 
A)  A blue suit for an accountant. 
B)  Appraisal fees on the sale of a personal residence. 
C)  Uniforms for a UPS delivery person. 
D) The cost of hauling tools to work in the trunk of a car.

Question 18

What is the maximum amount of home equity indebtedness on which interest is fully deductible?

Accepted Answer

A)  $0. 
B)  $50,000. 
C)  $100,000. 
D) $200,000. 
A)  $0. 
B)  $50,000. 
C)  $100,000. 
D) $200,000.

Question 19

For investment interest expense in 2015, the deduction by a taxpayer is:

Accepted Answer

A)  Limited to the investment interest expense paid in 2015. 
B)  Limited to the taxpayer's net investment income for 2015. 
C)  Not limited. 
D) Limited to the taxpayer's gross investment income for 2015. 
A)  Limited to the investment interest expense paid in 2015. 
B)  Limited to the taxpayer's net investment income for 2015. 
C)  Not limited. 
D) Limited to the taxpayer's gross investment income for 2015.

Question 20

Prescription drugs obtained outside the United States, such as from Canada, are never deductible on a U.S. tax return.

Accepted Answer

A) True 
 B)False

Taxes assessed for local benefits, such as a new sidewalk, are deductible as real property taxes.

In 2015, Allen's pleasure boat was destroyed by a flood. He had purchased the boat in 2012 for $45,000. On what form(s) will Allen report this loss?

For 2015, the AGI threshold for the deductibility of personal casualty losses generally is:

What are four major categories of deductible taxes for individual returns?

Abel's car was completely destroyed in an accident that was his fault. His loss was $8,500 and his insurance company reimbursed him $6,500. What amount of casualty loss can Abel claim on his return (beforedeductionlimitations)?

Personal property taxes paid on personal-use assets, such as the family car, are deductible on Schedule A.

For 2015, Lydia had adjusted gross income of $40,000 and made the following charitable contributions: What is the maximum amount that she can deduct as a charitable contribution for 2015?

Which of the following miscellaneous itemized deductions are not subject to the 2% adjusted gross income limitation?

For 2015, sales taxes paid may be deducted as an itemized deduction on Schedule A.

For determination of deductibility, all personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

The threshold amount for the deductibility of allowable medical expenses for those under 65 in 2015 is:

Which of the following items would be an itemized deduction on Schedule A of Form 1040 subjectto the 2% of AGI floor?

If a taxpayer's personal property is completely destroyed, the casualty loss deduction is still reduced by a required floor amount.

What are the general limits or floors placed on deductible personal casualty losses?

Taxes deductible as an itemized deduction include all of the following except:

Which of the following expenses is deductible, but subject to the 2% limitation on Form 1040, Schedule A, Job Expenses and Most Other Miscellaneous Itemized Deductions?

What is the maximum amount of home equity indebtedness on which interest is fully deductible?

For investment interest expense in 2015, the deduction by a taxpayer is:

Prescription drugs obtained outside the United States, such as from Canada, are never deductible on a U.S. tax return.

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Self-Employed Business Income

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities:

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 5: Itemized Deductions

Taxes assessed for local benefits, such as a new sidewalk, are deductible as real property taxes.

In 2015, Allen's pleasure boat was destroyed by a flood. He had purchased the boat in 2012 for $45,000. On what form(s) will Allen report this loss?

For 2015, the AGI threshold for the deductibility of personal casualty losses generally is:

What are four major categories of deductible taxes for individual returns?

Abel's car was completely destroyed in an accident that was his fault. His loss was $8,500 and his insurance company reimbursed him $6,500. What amount of casualty loss can Abel claim on his return (beforedeductionlimitations)?

Personal property taxes paid on personal-use assets, such as the family car, are deductible on Schedule A.

For 2015, Lydia had adjusted gross income of $40,000 and made the following charitable contributions: What is the maximum amount that she can deduct as a charitable contribution for 2015?

Which of the following miscellaneous itemized deductions are not subject to the 2% adjusted gross income limitation?

For 2015, sales taxes paid may be deducted as an itemized deduction on Schedule A.

For determination of deductibility, all personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

The threshold amount for the deductibility of allowable medical expenses for those under 65 in 2015 is:

Which of the following items would be an itemized deduction on Schedule A of Form 1040 subjectto the 2% of AGI floor?

If a taxpayer's personal property is completely destroyed, the casualty loss deduction is still reduced by a required floor amount.

What are the general limits or floors placed on deductible personal casualty losses?

Taxes deductible as an itemized deduction include all of the following except:

Which of the following expenses is deductible, but subject to the 2% limitation on Form 1040, Schedule A, Job Expenses and Most Other Miscellaneous Itemized Deductions?

What is the maximum amount of home equity indebtedness on which interest is fully deductible?

For investment interest expense in 2015, the deduction by a taxpayer is:

Prescription drugs obtained outside the United States, such as from Canada, are never deductible on a U.S. tax return.

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Self-Employed Business Income

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities:

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters