Question 1

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

Accepted Answer

A) Unreimbursed employee business expenses 
B) Gambling losses to the extent of gambling winnings 
C) Handicapped impairment related work expenses 
D) None of the above 
E) All of above

Question 2

Douglas and Dena paid the following amounts of interest during the current year:
​  
a.Calculate the amount of their allowable deduction for investment interest for the current year.
b.Calculate the amount of Douglas and Dena's total allowable deduction for interest for the current year.

Accepted Answer

The answer of Douglas and Dena paid the following amounts...

Question 3

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

Accepted Answer

A) True 
 B)False

Question 4

During the current year, Mr. and Mrs. West paid the following taxes: What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

Accepted Answer

A) $0 
B) $1,900 
C) $2,300 
D) $2,900 
E) None of the above

Question 5

Weber resides in a state that imposes a tax on income. The following information relating to Weber's state income taxes is available: Assuming he elects to deduct state and local income taxes, what amount should Weber use as state and local income taxes in calculating itemized deductions for his 2015 Federal income tax return?

Accepted Answer

A) $2,700 
B) $3,000 
C) $3,500 
D) $3,800 
E) None of the above

Question 6

Which of the following miscellaneous deductions are not subject to the 2 percent of adjusted gross income limitation?

Accepted Answer

A) Unreimbursed employee business expenses 
B) Investment expenses 
C) Unrecovered annuity costs at death 
D) Union dues 
E) None of the above

Question 7

Charles, a corporate executive, incurred business related, unreimbursed expenses in the current year as follows: Assuming that Charles itemizes his deductions, how much of these expenses should he deduct on his current year Schedule A, before considering the 2 percent of adjusted gross income limitation?

Accepted Answer

A) $600 
B) $900 
C) $1,500 
D) $2,100 
E) None of the above

Question 8

​Lodging for a trip associated with medical care associated with a licensed hospital is not deductible.

Accepted Answer

A) True 
 B)False

Question 9

If an employee receives a reimbursement for employee business expenses, the amount of the reimbursement is always excluded from gross income and the expenses are deductible as deductions for adjusted gross income.

Accepted Answer

A) True 
 B)False

Question 10

Expenses of education to improve or maintain existing skills are deductible as a miscellaneous itemized deduction even if the education incidentally leads to qualification in a new job or business.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

The textbook gives an example in which a house purchased for $25,000 with an appreciated value of $160,000 was completely destroyed. The casualty loss was limited to the taxpayer's basis of $25,000. Why shouldn't the full $160,000 be allowed as a loss?

Accepted Answer

The answer of The textbook gives an example in which...

Question 13

Which of the following is not deductible as a medical expense on Schedule A?

Accepted Answer

A) Payments to a nurse 
B) Payments for marriage counseling 
C) Payments for dentures 
D) Payments for psychiatric care 
E) All of the above are deductible as medical expenses

Question 14

Mary Lou took an $8,000 distribution from her educational savings account and used $6,000 to pay for qualified higher education expenses. The remaining balance of $2,000 was used to purchase clothes. On the date of the distribution, her educational savings account had a $25,000 balance including the $20,000 she had contributed. How much of the $8,000 distribution is tax-free?

Accepted Answer

A) $0 
B) $6,000 
C) $7,600 
D) $7,625 
E) $8,000

Question 15

​Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 16

The adjusted gross income (AGI) limitation on medical expenses is 15 percent.

Accepted Answer

A) True 
 B)False

Question 17

​Toni and Beyonze are married and file jointly. During 2015, they paid tuition for their daughter's college in the amount of $23,000. If their AGI was $142,000, what is the amount of tuition deduction they are eligible for?

Accepted Answer

A) ​$0 
B) ​$2,000 
C) ​$4,000 
D) ​$23,000 
E) ​None of the above

Question 18

Don gives his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Accepted Answer

The answer of Don gives his old car to a...

Question 19

​Agnes is retired and has only a $12,000 annual pension as income. In 2015, Agnes' aunt dies and leaves her land worth $1.2 million. Agnes sees no need for the land and donates it immediately to a qualified public charity. Agnes may deduct a $1.2 million charitable contribution on her 2015 tax return.

Accepted Answer

A) True 
 B)False

Question 20

Charlie is a single taxpayer with income of $107,000 which includes $22,500 of interest income. Contributions to educational savings accounts are phased out between $95,000 and $110,000. What is the maximum contribution Charlie can make to an educational savings account?

Accepted Answer

A) $400 
B) $1,600 
C) $2,000 
D) $2,500 
E) $0

Exam 5: Itemized Deductions and Other Incentives

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

Douglas and Dena paid the following amounts of interest during the current year: a.Calculate the amount of their allowable deduction for investment interest for the current year. b.Calculate the amount of Douglas and Dena's total allowable deduction for interest for the current year.

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

During the current year, Mr. and Mrs. West paid the following taxes: What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

Which of the following miscellaneous deductions are not subject to the 2 percent of adjusted gross income limitation?

Lodging for a trip associated with medical care associated with a licensed hospital is not deductible.

If an employee receives a reimbursement for employee business expenses, the amount of the reimbursement is always excluded from gross income and the expenses are deductible as deductions for adjusted gross income.

Expenses of education to improve or maintain existing skills are deductible as a miscellaneous itemized deduction even if the education incidentally leads to qualification in a new job or business.

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

The textbook gives an example in which a house purchased for $25,000 with an appreciated value of $160,000 was completely destroyed. The casualty loss was limited to the taxpayer's basis of $25,000. Why shouldn't the full $160,000 be allowed as a loss?

Which of the following is not deductible as a medical expense on Schedule A?

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

The adjusted gross income (AGI) limitation on medical expenses is 15 percent.

Toni and Beyonze are married and file jointly. During 2015, they paid tuition for their daughter's college in the amount of $23,000. If their AGI was $142,000, what is the amount of tuition deduction they are eligible for?

Don gives his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Charlie is a single taxpayer with income of $107,000 which includes $22,500 of interest income. Contributions to educational savings accounts are phased out between $95,000 and $110,000. What is the maximum contribution Charlie can make to an educational savings account?

Exam 5: Itemized Deductions and Other Incentives

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

Douglas and Dena paid the following amounts of interest during the current year: ​ a.Calculate the amount of their allowable deduction for investment interest for the current year. b.Calculate the amount of Douglas and Dena's total allowable deduction for interest for the current year.

Individual taxpayers may carry forward indefinitely charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

During the current year, Mr. and Mrs. West paid the following taxes: What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

Which of the following miscellaneous deductions are not subject to the 2 percent of adjusted gross income limitation?

​Lodging for a trip associated with medical care associated with a licensed hospital is not deductible.

If an employee receives a reimbursement for employee business expenses, the amount of the reimbursement is always excluded from gross income and the expenses are deductible as deductions for adjusted gross income.

Expenses of education to improve or maintain existing skills are deductible as a miscellaneous itemized deduction even if the education incidentally leads to qualification in a new job or business.

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

The textbook gives an example in which a house purchased for $25,000 with an appreciated value of $160,000 was completely destroyed. The casualty loss was limited to the taxpayer's basis of $25,000. Why shouldn't the full $160,000 be allowed as a loss?

Which of the following is not deductible as a medical expense on Schedule A?

​Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

The adjusted gross income (AGI) limitation on medical expenses is 15 percent.

​Toni and Beyonze are married and file jointly. During 2015, they paid tuition for their daughter's college in the amount of $23,000. If their AGI was $142,000, what is the amount of tuition deduction they are eligible for?

Don gives his old car to a qualified charity. The charity then sells the car at an auction. Describe the tax treatment of the donation.

Charlie is a single taxpayer with income of $107,000 which includes $22,500 of interest income. Contributions to educational savings accounts are phased out between $95,000 and $110,000. What is the maximum contribution Charlie can make to an educational savings account?

Douglas and Dena paid the following amounts of interest during the current year: a.Calculate the amount of their allowable deduction for investment interest for the current year. b.Calculate the amount of Douglas and Dena's total allowable deduction for interest for the current year.

Lodging for a trip associated with medical care associated with a licensed hospital is not deductible.

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work. Brittany's gas excise taxes are deductible as an itemized deduction.

Toni and Beyonze are married and file jointly. During 2015, they paid tuition for their daughter's college in the amount of $23,000. If their AGI was $142,000, what is the amount of tuition deduction they are eligible for?