Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Misti purchased a residence this year. Misti, age 32, is a single parent and lives with her 1-year-old daughter. This year, Misti received a salary of $160,000 and made the following payments:
   Misti files as a head of household. Calculate her taxable income this year.

Accepted Answer

$142,000 = ($160,000 − $18,000)
Misti's

Question 3

All reasonable moving expenses are deductible by employees.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a true statement?

Accepted Answer

A)  Individuals qualify for the moving expense deduction only if they change employers. 
B)  Individuals qualify for the moving expense deduction if their employer does not pay for the moving expenses. 
C)  Moving expenses are deductible from AGI. 
D)  Moving expenses are generally not deductible. 
E)  Moving expenses are deductible for AGI. 
A)  Individuals qualify for the moving expense deduction only if they change employers. 
B)  Individuals qualify for the moving expense deduction if their employer does not pay for the moving expenses. 
C)  Moving expenses are deductible from AGI. 
D)  Moving expenses are generally not deductible. 
E)  Moving expenses are deductible for AGI.

Question 5

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 choices are 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 choices are true.

Question 6

Generally, service businesses are considered qualified trade or businesses for purposes of the deduction for qualified business income.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a true statement?

Accepted Answer

A)  Employee business expenses are deducted for AGI. 
B)  Investment expenses are typically deducted for AGI. 
C)  Tax preparation fees are deducted for AGI. 
D)  Rental and royalty expenses are deducted for AGI. 
E)  All of the choices are correct. 
A)  Employee business expenses are deducted for AGI. 
B)  Investment expenses are typically deducted for AGI. 
C)  Tax preparation fees are deducted for AGI. 
D)  Rental and royalty expenses are deducted for AGI. 
E)  All of the choices are correct.

Question 8

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is not deductible after considering the excess business loss rules?

Accepted Answer

A)  $270,000. 
B)  $250,000. 
C)  $20,000. 
D)  $0. 
E)  None of the choices are correct. 
A)  $270,000. 
B)  $250,000. 
C)  $20,000. 
D)  $0. 
E)  None of the choices are correct.

Question 9

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is deductible after considering the excess business loss rules?

Accepted Answer

A)  $270,000. 
B)  $250,000. 
C)  $20,000. 
D)  $0. 
E)  None of the choices are correct. 
A)  $270,000. 
B)  $250,000. 
C)  $20,000. 
D)  $0. 
E)  None of the choices are correct.

Question 10

Self-employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self-employment taxes paid.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 a legal method of tax avoidance. 
D)  The standard deduction is subject to a phase-out based on AGI. 
E)  All of the choices 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 a legal method of tax avoidance. 
D)  The standard deduction is subject to a phase-out based on AGI. 
E)  All of the choices are true.

Question 13

Campbell, a single taxpayer, has $95,000 of profits from her general store that she operates as a sole proprietorship. She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income?

Accepted Answer

A)  $95,000. 
B)  $19,000. 
C)  $10,000. 
D)  $8,000. 
E)  $0. 
A)  $95,000. 
B)  $19,000. 
C)  $10,000. 
D)  $8,000. 
E)  $0.

Question 14

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 choices 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 choices are true.

Question 15

Rachel is an accountant who practices as a sole proprietor. This year, Rachel had net business income of $200,000 from her practice. Assume that Rachel pays $50,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $140,000. Calculate Rachel's deduction for qualified business income.

Accepted Answer

$28,000.
Since Rachel has taxable income

Question 16

Rachel is an accountant who practices as a sole proprietor. This year, Rachel had net business income of $270,000 from her practice. Assume that Rachel pays $50,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $225,000. Calculate Rachel's deduction for qualified business income.

Accepted Answer

$0.
Since Rachel has taxable income of $

Question 17

This year Latrell made the following charitable contributions:
   Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year. You may assume that the stock and painting has been owned for 10 years.

Accepted Answer

The charitable deduction is $40,500 over

Question 18

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 choices 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 choices are deductible as medical expenses.

Question 19

Simone donated a landscape painting (tangible capital gain property) to a library, a public charity. She purchased the painting five years ago for $50,000, and on the date of the gift, it had a fair market value of $200,000. What is her maximum charitable contribution deduction for the year if her AGI is $300,000 (before considering the itemized deduction phase-out)?

Accepted Answer

A)  $100,000. 
B)  $200,000. 
C)  $90,000 if the library uses the painting in its charitable purpose. 
D)  $150,000. 
E)  None of the choices are correct. 
A)  $100,000. 
B)  $200,000. 
C)  $90,000 if the library uses the painting in its charitable purpose. 
D)  $150,000. 
E)  None of the choices are correct.

Question 20

Brice is a single, self-employed electrician who earns $60,000 per year in self-employment income. Brice paid the following expenses this year. Which of the expenses are deductible for AGI? 1. The cost of health insurance (not purchased through an exchange)
2) The employer portion of self-employment tax paid
3) Penalty on early withdrawal of funds from a certificate of deposit

Accepted Answer

A)  Numbers 1 and 2 only. 
B)  Numbers 1 and 3 only. 
C)  Numbers 2 and 3 only. 
D)  None of the choices is deductible for AGI. 
E)  All of the choices are deductible for AGI. 
A)  Numbers 1 and 2 only. 
B)  Numbers 1 and 3 only. 
C)  Numbers 2 and 3 only. 
D)  None of the choices is deductible for AGI. 
E)  All of the choices are deductible for AGI.

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

Misti purchased a residence this year. Misti, age 32, is a single parent and lives with her 1-year-old daughter. This year, Misti received a salary of $160,000 and made the following payments: Misti files as a head of household. Calculate her taxable income this year.

All reasonable moving expenses are deductible by employees.

Which of the following is a true statement?

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?

Generally, service businesses are considered qualified trade or businesses for purposes of the deduction for qualified business income.

Which of the following is a true statement?

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is not deductible after considering the excess business loss rules?

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is deductible after considering the excess business loss rules?

Self-employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self-employment taxes paid.

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

Which of the following is a true statement?

Which of the following is a true statement?

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

An Introduction to Tax

Tax Compliance, the IRS, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 6: Individual Deductions

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

Misti purchased a residence this year. Misti, age 32, is a single parent and lives with her 1-year-old daughter. This year, Misti received a salary of $160,000 and made the following payments: Misti files as a head of household. Calculate her taxable income this year.

All reasonable moving expenses are deductible by employees.

Which of the following is a true statement?

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?

Generally, service businesses are considered qualified trade or businesses for purposes of the deduction for qualified business income.

Which of the following is a true statement?

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is not deductible after considering the excess business loss rules?

Max, a single taxpayer, has a $270,000 loss from his sole proprietorship. How much of this loss is deductible after considering the excess business loss rules?

Self-employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self-employment taxes paid.

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

Which of the following is a true statement?

Which of the following is a true statement?

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

An Introduction to Tax

Tax Compliance, the IRS, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters