Exam 6: Individual for Agi Deductions

Ilene rents her second home. During 2016, Ilene reported a net loss of $15,000 from the rental. If Ilene is an active participant in the rental and her AGI is $140,000, how much of the loss can she deduct against ordinary income in 2016?

Generally, which of the following does not correctly categorize the type of income?

The rental real estate exception favors:

Lisa, age 45, needed some cash so she received a $50,000 distribution from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 8 years ago. Through a rollover and annual contributions, she has contributed $80,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty?

Which of the following is a true statement?

Lisa, age 45, needed some cash so she received a $50,000 distribution from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty?

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance from the taxpayer's old residence to the taxpayer's new residence.

Describe the three main loss limitations that taxpayers must overcome before deducting losses allocated to them from a specific activity.

In 2016, Tyson (age 52) earned $50,000 of salary. Assuming he does not participate in an employer-sponsored plan, what is the maximum deductible IRA contribution Tyson can make in 2016?

Braxton owns a second home that he rents to others. During the year, he used the second home 50 days for personal use and 100 days for rental use. After allocating the home-related expenses between personal use and rental use, which of the following statements regarding the sequence of deductibility of the expenses allocated to the rental use is correct? (assume taxpayer has no expenses to obtain tenants)

Taxpayers contributing to and receiving distributions from a Roth IRA generally earn a before-tax rate of return on their contributions equal to their after-tax rate of return.

Which of the following is a true statement?

Which of the following statements regarding traditional IRAs is true?

Which of the following statements regarding Roth IRAs distributions is true?

In 2016, Tyson (age 22) earned $3,500 from his part-time job and he reported $15,000 of interest income (unearned income). Assuming he does not participate in an employer-sponsored plan, what is the maximum deductible IRA contribution Tyson can make in 2016?

Constance currently commutes 25 miles from her house to her existing part time job in the suburbs. Next week she begins a new full time job in another state, and this job location is 100 miles from her existing home. Because of the additional distance Constance is selling her house, and she has rented an apartment that is only 2 miles from her new job. Constance expects to pay the following moving expenses. Insurance \ 1,000 Mortgage interest 7,500 Property taxes 3,200 Repairs and maintenance 800 Utilities 1,700 Depreciation 5,700 Determine if this move qualifies for a moving expense deduction and calculate the amount (if any) of the deduction.

Self employed taxpayers can deduct the cost of health insurance as long as they do not actually participate in their spouses' employer-provided health plan.

Harriet owns a second home that she rents to others. During the year, she used the second home for 10 personal days and for 200 rental days. Which of the following statements regarding the manner in which she should account for her income and/or expenses associated with the home is incorrect?

The profit motive distinguishes "business" activities from "personal" activities.

Which of the following expenses can be deducted as moving expenses? 1. The cost of a trip to purchase a new residence 2) The cost of moving personal belongings 3) Lodging (one night) while en route 4) The cost of gasoline when traveling to the new residence 5) One-half of the cost of meals while en route to the new residence