Question 1

Which of the following costs are NOT deductible as an itemized medical expense?

Accepted Answer

A)  The cost of eyeglasses. 
B)  Payments to a hospital. 
C)  Transportation for medical purposes. 
D)  The cost of insurance for long-term care services. 
E)  All of the above are deductible as medical expenses. 
A)  The cost of eyeglasses. 
B)  Payments to a hospital. 
C)  Transportation for medical purposes. 
D)  The cost of insurance for long-term care services. 
E)  All of the above are deductible as medical expenses.

Question 2

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 3

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Accepted Answer

A) True 
 B)False

Question 4

An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.

Accepted Answer

A) True 
 B)False

Question 5

Don's personal auto was damaged in a wind storm this year. Don purchased the auto several years ago for $32,000 and it was worth $18,000 at the time of the storm. The damage was superficial, so Don decided not to repair the car. Although Don collected $750 from his insurance company, the value of the car dropped after the storm to $15,000. What is the amount of casualty loss from the storm damage before Don applies any floor limitations?

Accepted Answer

$2,250
Explanation: The loss i

Question 6

Toshiomi works as a sales representative and travels extensively for his employer's business. This year Toshiomi was paid $75,000 in salary and made the following expenditures: $$\begin{array} { | l | r | } 
\hline \text { Air fare } & \$ 1,300 \
\hline \text { Lodging } & 750 \
\hline \text { Meals } & 600 \
\hline \text { Cab fare } & 220 \
\hline
\end{array}$$ Toshiomi also made a number of trips to Las Vegas for gambling. This year Toshiomi won $12,000 in a poker tournament and this amount was almost enough to offset his other gambling losses ($13,420). Calculate Toshiomi's taxable income if he files single with one personal exemption.

Accepted Answer

$63,650 = 67,700 - 4,050 (personal exemp

Question 7

Ned is a head of household with a dependent son, Todd, who is a full-time student. This year Ned made the following expenditures related to Todd's support: $$\begin{array} { | l | r | } 
\hline \text { Auto insurance premiums } & \$ 1,700 \
\hline \text { Room and board at Todd's school } & 2,200 \
\hline \text { Health insurance premiums } & 600 \
\hline \text { Travel (to and from school) } & 350 \
\hline
\end{array}$$ What amount can Ned include in his itemized deductions?

Accepted Answer

A)  $1,700 included in Ned's miscellaneous itemized deductions 
B)  $2,050 included in Ned's miscellaneous itemized deductions 
C)  $950 included in Ned's miscellaneous itemized deductions 
D)  $600 included in Ned's medical expenses 
E)  None of the above. 
A)  $1,700 included in Ned's miscellaneous itemized deductions 
B)  $2,050 included in Ned's miscellaneous itemized deductions 
C)  $950 included in Ned's miscellaneous itemized deductions 
D)  $600 included in Ned's medical expenses 
E)  None of the above.

Question 8

To qualify as a charitable deduction the donation must be made by cash or by check.

Accepted Answer

A) True 
 B)False

Question 9

Jenna (age 50) files single and reports AGI of $40,000. This year she has incurred the following medical expenses: $$\begin{array} { | l | r | } 
\hline \text { State income tax withholding } & \$ 1,900 \
\hline \text { State income tax estimated } & 850 \
\text { payments }  \
\hline \text { Federal inc ome tax withholding } & 7,100\
\hline \text { Social Security tax withheld from } & 4,800 \
\text { wages }\
\hline \text { State excise tax on liquor } & 400 \
\hline \text { State inheritance tax } & 1,200 \
\hline \text { County real estate tax } & 790 \
\hline \text { School district tax on realty } & 510 \\hline
\end{array}$$ Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.

Accepted Answer

$1,910
Explanation: All expenses are qua

Question 10

Colby is employed full-time as a food technician for a local restaurant chain. This year he has incurred the following expenses associated with his employment: $$\begin{array} { | l | r | } 
\hline \text { Home mortgage interest } & \$ 6,640 \
\hline \text { Real estate taxes } & 5,400 \
\hline \text { State income taxes paid } & 6,300 \
\hline \text { Medical expenses (unreimbursed) } & 1,800 \
\hline \text { Employee business expenses (unreimburs ed) } & 450 \
\hline \text { Charitable contributions (cash to their church) } & 760 \
\hline
\end{array}$$ Colby was reimbursed $125 of the expenses from his employer's accountable plan. What amount can he include with his remaining itemized deductions if his AGI this year is $32,000?

Accepted Answer

$1,025 = [($280 + $310 + $1,20

Question 11

Chuck has AGI of $70,000 and has made the following payments: $$\begin{array} { | l | r | } 
\hline \text { Travel } & \$ 1,480 \
\hline \text { Paints and canvas } & 610 \
\text { Painting classes } & 230 \
\hline
\end{array}$$ Calculate the amount of taxes that Chuck can include with his itemized deductions.

Accepted Answer

$4,050 = $1,900 + $850 + $790

Question 12

Which of the following is a true statement?

Accepted Answer

A)  A casualty loss can only occur from storm damage. 
B)  Personal casualty losses can only be deducted to the extent that aggregate casualty losses exceed 10 percent of AGI after applying a $100 per incident deduction. 
C)  Individual casualty losses are only deductible if each individual loss exceeds $5,000. 
D)  Uninsured thefts of personal assets are not included with casualty losses. 
E)  All of the above are true. 
A)  A casualty loss can only occur from storm damage. 
B)  Personal casualty losses can only be deducted to the extent that aggregate casualty losses exceed 10 percent of AGI after applying a $100 per incident deduction. 
C)  Individual casualty losses are only deductible if each individual loss exceeds $5,000. 
D)  Uninsured thefts of personal assets are not included with casualty losses. 
E)  All of the above are true.

Question 13

Which of the following is a true statement?

Accepted Answer

A)  Taxpayers may only deduct interest on up to $1,500,000 of acquisition indebtedness. 
B)  Taxpayers may deduct interest on up to $1,000,000 of home-equity debt. 
C)  The deduction for investment interest expense is not subject to limitation. 
D)  Interest on home-equity debt up to $100,000 is deductible, even if the loan proceeds are used to buy a new car. 
E)  None of the above is true. 
A)  Taxpayers may only deduct interest on up to $1,500,000 of acquisition indebtedness. 
B)  Taxpayers may deduct interest on up to $1,000,000 of home-equity debt. 
C)  The deduction for investment interest expense is not subject to limitation. 
D)  Interest on home-equity debt up to $100,000 is deductible, even if the loan proceeds are used to buy a new car. 
E)  None of the above is true.

Question 14

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Accepted Answer

A) True 
 B)False

Question 15

Glenn is an accountant who races stock cars as a hobby. This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races. What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

Accepted Answer

A)  increase in taxable income of $2,000 
B)  increase in taxable income of $1,640 
C)  no change in taxable income 
D)  decrease in taxable income of $560 
E)  decrease in taxable income of $2,200 
A)  increase in taxable income of $2,000 
B)  increase in taxable income of $1,640 
C)  no change in taxable income 
D)  decrease in taxable income of $560 
E)  decrease in taxable income of $2,200

Question 16

This year, Benjamin Hassell paid $20,000 of interest on a mortgage on his home (Benjamin borrowed $600,000 to buy the residence and it is currently worth $1,000,000), $12,000 on a $150,000 home equity loan on his home, and $10,000 of interest on a mortgage on his vacation home (loan of $300,000; home purchased for $400,000). How much interest expense can Benjamin deduct as an itemized deduction?

Accepted Answer

$38,000.
Explanation: Benjamin's acquisi

Question 17

Misti purchased a residence this year. Misti is a single parent and lives with her 1-year old daughter. This year, Misti received a salary of $63,000 and made the following payments: $$\begin{array} { | l | r | } 
\hline \text { Emergency room and doctor visits } & \$ 3,760 \
\hline \text { Prescription medication } & 500 \
\hline \text { Physical therapy } & \underline { 600 } \
\hline \text { Total qualifying medical expenses } & \$ 4,860 \
\hline \text { Less insurance reimbursement } & \underline { - 1,200 } \
\hline \text { Qualifying medical expenses from the accident } & \$ 3,650 \
\hline
\end{array}$$ Misti files as a head of household and claims two exemptions. Calculate her taxable income this year.

Accepted Answer

$45,600 = $63,000 - $9,300 - ($4,050 × 2

Question 18

Andres and Lakeisha are married and file joint. Andres is 72 years old and in good health. Lakeisha is 62 years old and blind. What amount of standard deduction can Andres and Lakeisha claim this year?

Accepted Answer

A)  $15,100 
B)  $13,850 
C)  $9,300 
D)  $12,600 
E)  None of the above. 
A)  $15,100 
B)  $13,850 
C)  $9,300 
D)  $12,600 
E)  None of the above.

Question 19

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following unreimbursed expenses: $$\begin{array} { | l | r | } 
\hline \text { Subscriptions to tood publications } & \$ 300 \
\hline \text { Cooking class ("How to make better subs") } & 250 \
\text { Transportation between Grace's home and the shop } & 500 \
\hline
\end{array}$$ What is the amount of Fred's deduction before the application of any AGI limitations?

Accepted Answer

A)  $2,870 
B)  $2,570 
C)  $2,050 
D)  $1,300 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed. 
A)  $2,870 
B)  $2,570 
C)  $2,050 
D)  $1,300 
E)  $0 - the expenses cannot be deducted unless Fred is reimbursed.

Question 20

Which of the following taxes will not qualify as an itemized deduction?

Accepted Answer

A)  personal property taxes assessed on the value of specific property. 
B)  state, local, and foreign income taxes. 
C)  real estate taxes on a residence. 
D)  gasoline taxes on personal travel. 
E)  None of the above qualifies as an itemized deduction. 
A)  personal property taxes assessed on the value of specific property. 
B)  state, local, and foreign income taxes. 
C)  real estate taxes on a residence. 
D)  gasoline taxes on personal travel. 
E)  None of the above qualifies as an itemized deduction.

Which of the following costs are NOT deductible as an itemized medical expense?

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.

To qualify as a charitable deduction the donation must be made by cash or by check.

Chuck has AGI of $70,000 and has made the following payments: Travel \ 1,480 Paints and canvas 610 Painting classes 230 Calculate the amount of taxes that Chuck can include with his itemized deductions.

Which of the following is a true statement?

Which of the following is a true statement?

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Andres and Lakeisha are married and file joint. Andres is 72 years old and in good health. Lakeisha is 62 years old and blind. What amount of standard deduction can Andres and Lakeisha claim this year?

Which of the following taxes will not qualify as an itemized deduction?

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters

Exam 7: Individual From Agi Deductions

Which of the following costs are NOT deductible as an itemized medical expense?

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.

To qualify as a charitable deduction the donation must be made by cash or by check.

Chuck has AGI of $70,000 and has made the following payments: Travel \ 1,480 Paints and canvas 610 Painting classes 230 Calculate the amount of taxes that Chuck can include with his itemized deductions.

Which of the following is a true statement?

Which of the following is a true statement?

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Andres and Lakeisha are married and file joint. Andres is 72 years old and in good health. Lakeisha is 62 years old and blind. What amount of standard deduction can Andres and Lakeisha claim this year?

Which of the following taxes will not qualify as an itemized deduction?

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters