Exam 6: Individual Deductions

Grace is a single medical student at State University, a qualified educational institution. This year Grace paid university tuition of $12,000. Grace works part-time at the University library, and this year she reports $15,000 of salary and no other items of income or expense. Which of the following is a true statement?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

Which of the following is a true statement?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony. What is Tiffanie's AGI?

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(Essay)

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Question 3

Correct Answer:

Verified

$71,250 ($62,700 + $12,000 - $2,200 - $1,250 = $71,250)
Explanation: The alimony and salary are income, and the moving expense and part of the educational interest are deductible for AGI. Tiffanie's maximum educational interest deduction (amount paid up to $2,500) is limited to $1,250. The deduction for educational interest ($2,500) is subject to phase-out because Tiffanie's modified AGI exceeds $65,000. The phase out is calculated by subtracting $65,000 from Tiffanie's modified AGI ($62,700 + $12,000 - $2,200 = $72,500) and dividing by $15,000 as follows: $2,500 * [($72,500 - $65,000)/$15,000] = $1,250. Thus, the amount deductible is $1,250 [$2,500 - $1,250 = $1,250].

Casey currently commutes 35 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Which of the following is a true statement?

(Multiple Choice)

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Question 4

Which of the following is a true statement?

(Multiple Choice)

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Question 5

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

(True/False)

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Question 6

This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

(Multiple Choice)

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Question 7

Han is a self-employed carpenter and his wife, Christine, works full-time as a grade school teacher. Han paid $525 for carpentry tools and supplies, and Christine paid $3,600 as her share of health insurance premiums (not with pre-tax dollars) for Han and herself in a qualified plan provided by the school district (not through an exchange). Which of the following is a true statement?

(Multiple Choice)

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Question 8

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.

(True/False)

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Question 9

Which of the following is a true statement?

(Multiple Choice)

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Question 10

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

(True/False)

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Question 11

Clark is a registered nurse and full time employee of the Hays Hospital. To maintain his nursing license Clark has incurred the following expenses: 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?

(Essay)

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Question 12

Chuck has AGI of $70,000 and has made the following payments Calculate the amount of taxes that Chuck can include with his itemized deductions.

(Short Answer)

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Question 13

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

(True/False)

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Question 14

In 2016, personal and dependency exemptions are $6,300 for single taxpayers.

(True/False)

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Question 15

Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence and on up to $500,000 of home-equity debt.

(True/False)

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Question 16

This year, Jong paid $3,000 of interest on a qualified education loan. Jong files married filing joint and reports modified AGI of $142,000. What is Jong's deduction for interest expense on an educational loan?

(Multiple Choice)

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Question 17

Carly donated inventory (ordinary income property) to a church. She purchased the inventory last month for $100,000, and on the date of the gift, it had a fair market value of $92,000. What is her maximum charitable contribution deduction for the year related to this inventory if her AGI is $200,000?

(Multiple Choice)

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Question 18

Which of the following is a true statement?

(Multiple Choice)

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Question 19

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: Misti files as a head of household and claims two exemptions. Calculate her taxable income this year.

(Short Answer)

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Question 20

Showing 1 - 20 of 114

Which of the following is a true statement?

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony. What is Tiffanie's AGI?

Which of the following is a true statement?

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

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.

Which of the following is a true statement?

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

Chuck has AGI of $70,000 and has made the following payments Calculate the amount of taxes that Chuck can include with his itemized deductions.

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

In 2016, personal and dependency exemptions are $6,300 for single taxpayers.

Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence and on up to $500,000 of home-equity debt.

This year, Jong paid $3,000 of interest on a qualified education loan. Jong files married filing joint and reports modified AGI of $142,000. What is Jong's deduction for interest expense on an educational loan?

Which of the following is a true statement?

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: Misti files as a head of household and claims two exemptions. Calculate her taxable income this year.

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