Exam 5: Itemized Deductions and Other Incentives

Roberto,age 50,has AGI of $110,000 for 2017.He has medical expenses of $13,200.How much of the medical expenses can Roberto deduct on his Schedule A for 2017?

To calculate the amount of state and local income taxes which may be deducted as an itemized deduction,state income taxes paid during the year must be reduced by state income tax refunds received during the year.

Ellen and Rick are married with one dependent child.They have AGI of $355,300,and itemized deductions consisting of $20,000 state income taxes and $20,000 medical expenses,after applying the 10 percent of AGI limitation. ​ Compute the following for 2017: ​ a.Itemized deductions allowed after the phase-out for high-income taxpayers. b.Exemption deductions (ordinarily $4,050 x 3)after the high-income phase-out. c.Taxable income.

Which of the following is not considered a deductible medical expense?

For married taxpayers filing a joint return in 2017,at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs (Section 529 plans)start?

Bill has a mortgage loan on his personal residence.He decides to pay 18 months of interest in advance on October 1,2017.The total advanced interest payment is $36,000.How much of the advance interest payment can he deduct in 2017?

The cost of a chiropractor's services qualifies as a medical deduction.

The cost of a fishing license is considered a personal property tax and is deductible as an itemized deduction.

Which of the following is correct for Qualified Tuition Programs?

Which of the following miscellaneous deductions is subject to the 2 percent of adjusted gross income limitation?

Sam operates a manufacturing company as a sole proprietorship.During the current year,the machinery used in the manufacturing process is totally destroyed by a fire in the building.The machinery had an adjusted basis of $16,000 and a fair market value of $11,000 on the date of the fire.The machinery was insured and Sam receives $10,000 from the insurance company.Sam does not replace the machinery.Assuming Sam has adjusted gross income of $60,000 for the current year,calculate the amount of Sam's casualty loss for the current year.

What income tax form does an employee use to report business expenses that are not reimbursed by an employer under an accountable plan?

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Jake developed serious health problems and had his bathroom remodeled so it is wheelchair-accessible and had a handicapped shower installed,based on a written prescription by his doctor.The cost of the remodel is $15,000 and is deemed to add no value to his house by a real estate appraiser.How is the cost of the remodel treated on Jake's tax return?

Taxpayers must itemize their deductions to be allowed a charitable contribution deduction.

During the current year,Hom donates a sculpture that cost $1,000 to a museum for exhibition.The sculpture's fair market value was $1,700 on the date of the donation,and Hom's adjusted gross income is $40,000. a.​ Assume Hom held the sculpture for 4 months and the $700 ($1,700 - $1,000)of appreciation is a short-term capital gain.Calculate the amount of his itemized deduction for the contribution. b.​ Assume Hom held the sculpture for 2 years and the $700 appreciation is a long-term capital gain.Calculate the amount of his itemized deduction for the contribution.

Casualty and theft losses must be reduced by amounts recovered from insurance coverage.

Dr.Wheeler donates her time and services to Doctors with No Limits,a qualified charity.Dr.Wheeler can take a tax deduction for the $3,400 market value of her time donated.

Newt is a single taxpayer living in Hollywood,California,with adjusted gross income for the 2017 tax year of $43,050.Newt's employer withheld $3,700 in state income tax from his salary.In April of 2017,he paid $300 in additional state taxes for his prior year's return.The real estate taxes on his home are $1,800 for 2017 and his personal property tax based on the value of his automobile is $75.Also,he paid $210 for state gasoline taxes for the year.The IRS estimate of general sales tax for Newt is $1,200 for 2017. ​ How much should Newt deduct on Schedule A of Form 1040 of his 2017 tax return for taxes paid?

Andy borrows $20,000 to invest in bonds.During the current year,his interest on the loan is $2,000.Andy's interest income from the bonds is $400 and his investment expenses are $300. a.Calculate Andy's itemized deduction for investment interest for this year. b.Is Andy entitled to a deduction in future years?