Question 1

Bunching itemized deductions is one form of tax evasion.

Accepted Answer

A) True 
 B)False

Question 2

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Accepted Answer

A) True 
 B)False

Question 3

Larry recorded the following donations this year: $500 cash to a family in need
$2,400 to a church
$500 cash to a political campaign
To the Salvation Army household items that originally cost $1,200 but are worth $300.
What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

Accepted Answer

A)  $2,900 
B)  $1,000 
C)  $2,700 
D)  $4,600 
E)  None of the above 
A)  $2,900 
B)  $1,000 
C)  $2,700 
D)  $4,600 
E)  None of the above

Question 4

This year Amanda paid $749 in Federal gift taxes on a gratuitous transfer to her nephew. Amanda lives in Texas and does not pay any state or local income taxes. Which of the following is a true statement?

Accepted Answer

A)  Amanda cannot deduct Federal gift taxes. 
B)  Amanda can deduct Federal gift taxes for AGI. 
C)  Amanda can deduct Federal gift taxes paid as an itemized deduction. 
D)  Amanda must include Federal gift taxes with other miscellaneous itemized deductions. 
E)  None of the above is true. 
A)  Amanda cannot deduct Federal gift taxes. 
B)  Amanda can deduct Federal gift taxes for AGI. 
C)  Amanda can deduct Federal gift taxes paid as an itemized deduction. 
D)  Amanda must include Federal gift taxes with other miscellaneous itemized deductions. 
E)  None of the above is true.

Question 5

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Accepted Answer

A)  gambling losses to the extent of gambling winnings 
B)  fees for investment advice 
C)  employee business expenses 
D)  tax preparation fees 
E)  All of the above are subject to the 2 percent of AGI floor limit 
A)  gambling losses to the extent of gambling winnings 
B)  fees for investment advice 
C)  employee business expenses 
D)  tax preparation fees 
E)  All of the above are subject to the 2 percent of AGI floor limit

Question 6

Which of the following is a true statement?

Accepted Answer

A)  Expenses associated with a "hobby" are never deductible. 
B)  The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances. 
C)  Taxpayers engaged in a "hobby" are always presumed to be motivated by profit. 
D)  The regulations do not provide any guidance for determining whether an activity is profit motivated. 
E)  All of the above are true. 
A)  Expenses associated with a "hobby" are never deductible. 
B)  The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances. 
C)  Taxpayers engaged in a "hobby" are always presumed to be motivated by profit. 
D)  The regulations do not provide any guidance for determining whether an activity is profit motivated. 
E)  All of the above are true.

Question 7

Which of the following is a true statement?

Accepted Answer

A)  the deduction of cash contributions to public charities is limited to 30 percent of AGI. 
B)  the deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI. 
C)  the deduction of capital gain property to public charities is limited to 20 percent of AGI. 
D)  the deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI. 
E)  None of the above is true. 
A)  the deduction of cash contributions to public charities is limited to 30 percent of AGI. 
B)  the deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI. 
C)  the deduction of capital gain property to public charities is limited to 20 percent of AGI. 
D)  the deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI. 
E)  None of the above is true.

Question 8

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Accepted Answer

A) True 
 B)False

Question 9

This year Norma paid $1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to $3,100. Which of the following is a true statement if Norma files single with one personal exemption?

Accepted Answer

A)  Norma can deduct 4,300 for AGI. 
B)  Norma should deduct $1,200 even if her standard deduction is $6,300. 
C)  Norma should deduct $4,300 even if her standard deduction is $6,300. 
D)  Norma should deduct $3,100 even if her standard deduction is $6,300. 
E)  Norma should claim the standard deduction. 
A)  Norma can deduct 4,300 for AGI. 
B)  Norma should deduct $1,200 even if her standard deduction is $6,300. 
C)  Norma should deduct $4,300 even if her standard deduction is $6,300. 
D)  Norma should deduct $3,100 even if her standard deduction is $6,300. 
E)  Norma should claim the standard deduction.

Question 10

Which of the following costs are deductible as an itemized medical expense?

Accepted Answer

A)  The cost of prescription medicine and over-the-counter drugs. 
B)  Medical expenses incurred to prevent disease. 
C)  The cost of elective cosmetic surgery. 
D)  Medical expenses reimbursed by health insurance. 
E)  None of the above costs is deductible. 
A)  The cost of prescription medicine and over-the-counter drugs. 
B)  Medical expenses incurred to prevent disease. 
C)  The cost of elective cosmetic surgery. 
D)  Medical expenses reimbursed by health insurance. 
E)  None of the above costs is deductible.

Question 11

Which of the following is a true statement?

Accepted Answer

A)  Personal exemptions, but not dependency exemptions, are subject to phase-out. 
B)  A married filing joint taxpayer with AGI of $500,000 would not be able to deduct personal and dependency exemptions. 
C)  At most, only 80% of exemptions are subject to phase-out. 
D)  Itemized deductions, but not exemptions, are subject to phase-out. 
E)  None of the above is true. 
A)  Personal exemptions, but not dependency exemptions, are subject to phase-out. 
B)  A married filing joint taxpayer with AGI of $500,000 would not be able to deduct personal and dependency exemptions. 
C)  At most, only 80% of exemptions are subject to phase-out. 
D)  Itemized deductions, but not exemptions, are subject to phase-out. 
E)  None of the above is true.

Question 12

Which of the following is a true statement?

Accepted Answer

A)  A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B)  A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C)  A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D)  Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E)  All of the above are true. 
A)  A taxpayer can deduct medical expenses incurred for members of his family who are dependents. 
B)  A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. 
C)  A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. 
D)  Deductible medical expenses include long-term care services for disabled spouses and dependents. 
E)  All of the above are true.

Question 13

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal, state, municipal, or foreign authorities.

Accepted Answer

A) True 
 B)False

Question 14

Justin and Georgia file married jointly with one dependent. This year, their AGI is $325,300. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Accepted Answer

$10,692
Ex

Question 15

Deductible medical expenses include payments to medical care providers such as doctors, dentists, and nurses and medical care facilities such as hospitals.

Accepted Answer

A) True 
 B)False

Question 16

This year Darcy made the following charitable contributions: $$\begin{array} { | l | r | } 
\hline \text { Hospital charges } & \$ 3,280 \
\hline \text { Prescription medicine } & 510 \
\text { Doctor's tees } & 1,240 \
\hline
\end{array}$$ Determine the maximum amount of charitable deduction for Darcy's contribution of the painting if her AGI is $80,000 this year. You may assume that both the stock and painting have been owned for 10 years and the painting is used in the State Art Museum's charitable purpose.

Accepted Answer

The charitable deduction is $21,000 for

Question 17

Bryan is 67 years old and lives alone. This year he has received $25,000 in taxable interest and pension payments, and he has paid the following expenses: $$\begin{array} { | l | r | } 
\hline \text { Auto insurance premiums } & \$ 1,700 \
\hline \text { Room and board at Todd's school } & 2,200 \
\hline \text { Health insurance premiums } & 600 \
\hline \text { Travel (to and from school) } & 350 \
\hline
\end{array}$$ If Bryan files single with one personal exemption, calculate his taxable income.

Accepted Answer

$13,100 = $25,000 - $7,850 - $4,050
Expl

Question 18

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a true statement?

Accepted Answer

A)  The standard deduction is increased for taxpayers who are blind or deaf at year end. 
B)  A married couple is only entitled to one addition to their standard deduction even if both spouses are both over age 65. 
C)  Bunching itemized deductions is an illegal method of tax avoidance. 
D)  The deduction for personal and dependency exemptions is $4,050 times the number of exemptions. 
E)  All of the above are true. 
A)  The standard deduction is increased for taxpayers who are blind or deaf at year end. 
B)  A married couple is only entitled to one addition to their standard deduction even if both spouses are both over age 65. 
C)  Bunching itemized deductions is an illegal method of tax avoidance. 
D)  The deduction for personal and dependency exemptions is $4,050 times the number of exemptions. 
E)  All of the above are true.

Question 20

Clark is a registered nurse and full-time employee of the Hays Hospital. To maintain his nursing license Clark has incurred the following expenses: $\begin{array}{|l|r|}
\hline\text { Real estate taxes } & \$ 1,640 \
\hline \text { Medical expenses (\$2,000 was reimbursed } & 3,650 \
\text { by insurance) } \
\hline \begin{array}{l}
\text { Charitable contributions (cash to the Unity } \
\text { church) }
\end{array} & 460  \
\hline
\end{array}$ Clark was reimbursed $1,250 of his expenses from his Hays Hospital accountable reimbursement plan. What amount can he include with his remaining itemized deductions if his AGI this year is $52,000?

Accepted Answer

$1,010 = [($1,650 + $400 + $80

Bunching itemized deductions is one form of tax evasion.

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Larry recorded the following donations this year: $500 cash to a family in need $2,400 to a church $500 cash to a political campaign To the Salvation Army household items that originally cost $1,200 but are worth $300. What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

This year Amanda paid $749 in Federal gift taxes on a gratuitous transfer to her nephew. Amanda lives in Texas and does not pay any state or local income taxes. Which of the following is a true statement?

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Which of the following is a true statement?

Which of the following is a true statement?

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

This year Norma paid $1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to $3,100. Which of the following is a true statement if Norma files single with one personal exemption?

Which of the following costs are deductible as an itemized medical expense?

Which of the following is a true statement?

Which of the following is a true statement?

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal, state, municipal, or foreign authorities.

Justin and Georgia file married jointly with one dependent. This year, their AGI is $325,300. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Deductible medical expenses include payments to medical care providers such as doctors, dentists, and nurses and medical care facilities such as hospitals.

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Which of the following is a true statement?

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

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Exam 7: Individual From Agi Deductions

Bunching itemized deductions is one form of tax evasion.

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Larry recorded the following donations this year: $500 cash to a family in need $2,400 to a church $500 cash to a political campaign To the Salvation Army household items that originally cost $1,200 but are worth $300. What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

This year Amanda paid $749 in Federal gift taxes on a gratuitous transfer to her nephew. Amanda lives in Texas and does not pay any state or local income taxes. Which of the following is a true statement?

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Which of the following is a true statement?

Which of the following is a true statement?

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

This year Norma paid $1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to $3,100. Which of the following is a true statement if Norma files single with one personal exemption?

Which of the following costs are deductible as an itemized medical expense?

Which of the following is a true statement?

Which of the following is a true statement?

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal, state, municipal, or foreign authorities.

Justin and Georgia file married jointly with one dependent. This year, their AGI is $325,300. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Deductible medical expenses include payments to medical care providers such as doctors, dentists, and nurses and medical care facilities such as hospitals.

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Which of the following is a true statement?

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